Wed | Nov 20, 2019

Grenada signs vesting order approving sale of Scotiabank

Published:Friday | October 18, 2019 | 10:01 AM
Prime Minister Dr Keith Mitchell signing vesting order in the presence of Scotiabank, Republic Bank and Technical and Allied Workers Union officials - CMC photo

ST GEORGE’S, Grenada, CMC – Grenada has become the first Caribbean country to sign the vesting order facilitating the sale of several Scotiabank branches in the Caribbean to the Trinidad-based Republic Bank Financial Holdings Limited.

Last November, Republic Bank had indicated that a purchase price of US$123 million had been put forward to acquire Scotiabank operations in Guyana, St Maarten, Anguilla, Antigua and Barbuda, Dominica, Grenada, St Kitts and Nevis, St Lucia, and St Vincent and the Grenadines.

Antigua and Barbuda and Guyana have opposed the sale, with St John’s in negotiations with Scotiabank to take over its operations there and Georgetown noting that the sale would adversely affect competition in the banking sector in the country.

In September, the St Kitts-based Eastern Caribbean Central Bank in consultation with its Monetary Council approved the application for the transfer of Scotiabank’s assets and liabilities in Grenada and five other Caribbean countries.

Grenada’s Prime Minister Dr Keith Mitchell, who is also Finance Minister, speaking at the signing ceremony, said it was important for the country to show leadership in the conclusion of the matter.

“I wanted to signal that Grenada is the first to sign that vesting order. I felt this initiative was important to demonstrate that we have in fact settled the issues that were concerning to us,” said Mitchell, who is also the current Chairman of the Monetary Council.

“Having sat at the table of the Monetary Council and having to confront all of the issues that faced us with regard to the sale of Scotiabank, I did my best to counsel others to approach this with an understanding of the importance of finance to the region and the implications it has for the regional banking system, knowing the challenges that we face.”

Mitchell spoke of the importance of banks in Grenada and other Caribbean countries having international relations with powerful banking institutions.

“I see Republic Bank, given its history of banking relations with international institutions, as an important factor in the decision made in Grenada’s case. Also, for the Monetary Council when we debated the issue, we felt that was a key factor.”

He also underscored the importance of the acquisition from a regional perspective, noting “this has to be seen as a unified approach, especially in the context of the ECCB; it is not just about individual countries.

“That’s why we have been counselling our friends throughout the region and Antigua and Barbuda in particular that we have to do this together.”

Mitchell said that Grenada has earned more than EC$ 2 million in taxes from the acquisition deal and that more importantly protecting the rights of workers was a key consideration in giving final approval to the acquisition.

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