Haynes calls sale un­for­tu­nate

Daily Nation (Barbados) - - News -

Gover­nor of the Cen­tral Bank of Bar­ba­dos Cle­vis­ton Haynes has de­scribed the ac­qui­si­tion of Sco­tia Bank’s op­er­a­tions in sev­eral Caribbean coun­tries by Re­pub­lic Bank, as “a slightly un­for­tu­nate de­vel­op­ment for the re­gion”.

His ob­ser­va­tions were made fol­low­ing yes­ter­day’s an­nounce­ment in which a Cana­dian com­pany is ac­quir­ing the Bar­ba­dian fi­nan­cial com­pany Sagi­cor, in a $1 bil­lion deal in­volv­ing Re­pub­lic Bank and Sco­tia­bank.

He pointed out the Caribbean had to recog­nise it was op­er­at­ing in a “mo­bile econ­omy where firms will seek to re­po­si­tion them­selves from time to time” and ob­served that both in­stances rep­re­sented “sit­u­a­tions where en­ti­ties are re-ap­prais­ing their fu­ture de­vel­op­ment.”

In the case of Sagi­cor, Haynes told mem­bers of the busi­ness com­mu­nity at­tend­ing a Cham­ber of Com­merce lun­cheon: “What we have in the Caribbean gen­er­ally are very small en­ter­prises and to be suc­cess­ful glob­ally re­ally means crit­i­cal mass and I sus­pect that is part of the de­ci­sion-mak­ing which in­flu­enced Sagi­cor’s de­ci­sion.

Sig­nif­i­cant risks

“Bank­ing in the re­gion par­tic­u­larly post the global fi­nan­cial cri­sis has not been seen as very prof­itable,” Haynes added, while sug­gest­ing that some of the Cana­dian banks ei­ther saw sig­nif­i­cant risks or per­haps did not see the type of re­turns which they would want to make.

“I think that this is per­haps a slightly un­for­tu­nate de­vel­op­ment for the re­gion be­cause I think that cer­tainly as it re­lates to bank­ing, the re­gion has ben­e­fited all though the global fi­nan­cial cri­sis and more re­cently in the de-risk­ing ini­tia­tives be­ing taken.”

Caribbean banks have in re­cent times been vic­tims of de-risk­ing prac­tices by large in­ter­na­tional banks, which have been in­creas­ingly ter­mi­nat­ing or re­struc­tur­ing busi­ness re­la­tion­ships with small banks in some re­gions of the world.

The Cen­tral Bank Gover­nor said though there was of­ten crit­i­cism of “the pric­ing” of the in­ter­na­tional banks, “as re­gional economies, hav­ing the Cana­dian banks present has been to our ben­e­fit and there­fore there must be a lit­tle con­cern where as a re­gion it ap­pears that we are be­gin­ning to lose some of these banks .

“It is some­thing that we have to look at very care­fully but we also have to recog­nise it in the con­text of the global repo­si­tion­ing of the large cor­po­rate en­ti­ties,” Haynes added.

(Pic­ture by Nigel Browne.)

Gover­nor of the Cen­tral Bank of Bar­ba­dos Dr Cle­vis­ton Haynes (left) field­ing ques­tions from mem­bers of the Bar­ba­dos Cham­ber of Com­merce and In­dus­try yes­ter­day. At right is mod­er­a­tor David El­lis.

Newspapers in English

Newspapers from Barbados

© PressReader. All rights reserved.