Haynes calls sale unfortunate
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.
“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.
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.