The St Vincent and the Grenadines government has welcomed the announcement by a consortium of banks in the Eastern Caribbean Currency Union (ECCU) that it had entered into a definitive agreement to acquire the branches and banking operations of the CIBC FirstCaribbean in four Eastern Caribbean islands.
The majority Canadian-owned bank announced on Tuesday that its wholly-owned subsidiary, FCIB Barbados, has agreed to sell its banking assets in four The Organisation of Eastern Caribbean States (OECS).
In a statement on Tuesday it identified the four members of the consortium: • The National Bank of Dominica Limited • Grenada Co-operative Bank Limited • St Kitts-Nevis-Anguilla National Bank Limited • The Bank of St Vincent and the Grenadines Limited (agent of the consortium)
Also its wholly-owned subsidiary, First Caribbean International Bank (Cayman), has agreed to sell its banking assets in Aruba to Aruba Bank NV.
Speaking on a radio programme of his ruling Unity Labour Party (ULP) on Tuesday night, Vincentian Prime Minister Dr. Ralph Gonsalves, said the local bank will benefit significantly from the acquisition.
“The current market share in terms of loans and advances for Bank of St. Vincent is 52 per cent, but when we add, after the acquisition of CIBC we will be almost about 67 per cent moving from EC$670 million to over EC$832 million and so they will add about EC$160 million in loans and advances.
“In deposits, our current share is about 49 per cent , when you add the CIBC it will be nearly 72 per cent to approximately EC$1.6 billion. So you are going to have total assets there of what is now 51 per cent market share for Bank of St. Vincent that would rise to 67 per cent or EC$1.8 billion.”
Gonsalves said that he was pleased with the restricting exercise undertaken at the local bank prior to the acquisition adding “we would not have been able to grab some of CIBC.”
The transactions are all subject to regulatory approval, including from the Central Bank of Barbados, and are expected to be finalised in the coming months.
In Aruba, the purchaser is Aruba Bank, the largest commercial bank on the island. That transaction is subject to regulatory approval by the Central Bank of Aruba (CBA).
In announcing that the applications will be submitted shortly to the various regulatory bodies, CIBC FirstCaribbean’s chief executive officer, Colette Delaney, noted the transactions enable First Caribbean to optimise and simplify its business, further enhance efficiency and focus on core markets to accelerate growth.
“In each case we chose a partner that is an excellent fit in its respective market, given that its knowledge of the local markets match with our product offerings and client base and strong market positioning,” said Delaney, adding: “They each bring a depth of local knowledge to the market and the needs of our clients there, which we believe will serve them well in their positioning for the future. We remain committed to executing on our long-term strategy and delivering the best outcome for clients, shareholders, employees and communities.”
Delaney said the four OECS-based banks are market leaders in their respective territories, offering the full spectrum of commercial banking services and electronic channels.
“They are supervised by the Eastern Caribbean Central Bank and require its regulatory approval. Collectively, they have been serving the peoples of the ECCU for a combined period of over 200 years. Their customer base includes consumers, small and middle-market businesses, large corporations, statutory bodies and central governments; and remain committed to helping their customers achieve success.”
In announcing the signing of the various agreements to CIBC First Caribbean’s staff across the region, Delaney noted that all sides are working diligently to ensure the transition will be seamless in the five countries.
Managing Director of the Bank of St. Vincent and the Grenadines Limited, Derry Williams, who led the negotiations on behalf of the four OECS banks stated: “This acquisition represents a significant development in the evolution of the Banking System of the ECCU. Once approved by the regulators, we are very confident that it will lay the basis for further enhanced value creation in these economies and greater prosperity for our society.”
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