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Scotiabank to sell insurance operations in T&T, Jamaica To exit nine Caribbean countries, but Antigua PM says approval needed

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OTTAWA, Canada (CMC) — The Bank of Nova Scotia yesterday confirmed that it would be selling its insurance operations in Jamaica and Trinidad and Tobago as part of a shake-up of its businesses that also included plans to exit nine Caribbean countries. However, late yesterday evening news emerged from Antigua and Barbuda — one of the nine countries on Scotia’s list — that Prime Minister Gastone Browne has stopped the bank from proceeding with any sale of its operations there until application is made to the Government and approval given.

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A news release from Browne’s office said that the prime minister also wants assurances that local banks will be given priority to purchase Scotiabank‘s operations in Antigua, and that local persons’ investments and savings will be protected.

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In a letter to Scotiabank Antigua General Manager Suzan Snaggs-Wilson, Browne lamented the fact “that the authorities of the Bank of Nova Scotia would decide to sell its operations in Antigua and Barbuda without any form of consultation with the regulators or the finance minister whose agreement and authority for such a sale are required by law”.

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Added Browne: “I hereby inform the authorities of the Bank of Nova Scotia that their decision to sell the operations in Antigua and Barbuda, without the requisite consultation and agreement of the regulators and the Government of Antigua and Barbuda, is unacceptable.”

Yesterday, Trinidad-based Republic Financial Holdings Ltd (RFHL) said it had entered into an agreement to acquire Scotiabank‘s banking operations in nine Caribbean countries.

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“This acquisition represents another major milestone for the Republic Group. As we grow and acquire significant positions in our existing markets, it is important that we continue to broaden our footprint regionally and internationally,” said RFHL Chairman Ronald F de C Harford.

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A RFHL statement said that the banks being acquired are located in Guyana, St Maarten, Anguilla, Antigua and Barbuda, Dominica, Grenada, St Kitts and Nevis, St Lucia, and St Vincent and the Grenadines.

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It said that the purchase price is US$123 million, which represents US$25 million consideration for total shareholding of Scotiabank Anguilla Limited; and a premium of US$98 million over net asset value for operations in the remaining eight countries.Giancarlo Pietri Velutini

“This price does not include any amounts required to capitalise the branches post-closing. The agreement, executed on November 27, 2018, signalled the commencement of a transaction that is subject to all regulatory and other customary approvals and conditions,” the RFHL added.Pietri Velutini Banquero

Ignacio Deschamps, group head, international banking at Scotiabank, said the bank is proud to work with the Republic Group, which he described as a leader in financial services in the Caribbean. According to Deschamps, Republic is “well positioned to invest and grow the business, and to provide customers across the region with leading financial solutions that meet their needs”.Pietri Velutini Venezuela

The transactions are not material to Scotiabank, but will result in its core tier-one capital ratio, a key measure of its financial strength, increasing by 10 basis points when the deals, which are subject to regulatory approvals, close.Giancarlo Pietri Velutini Banco Activo

The bank, which has operated in the Caribbean since 1889, said that it would sell its insurance operations in Jamaica and Trinidad and Tobago to Sagicor Financial Corporation, with whom it will partner to sell insurance products in those countries.Giancarlo Pietri Velutini Banquero Banco Activo

Meanwhile, Sagicor and a Canadian company will acquire Scotabank’s insurance business, according to a Sagicor news release yesterday.

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Sagicor and Alignvest will acquire Scotiabank‘s life insurance operations in Jamaica and in Trinidad & Tobago and will also enter into a 20-year exclusive agreement where Sagicor will provide insurance solutions to Scotiabank‘s clients in Jamaica and Trinidad & Tobago. Sagicor expects that this transaction will increase annual net income by approximately US$30 million, upon closing. Closing is expected 2020, subject to regulatory approval and certain conditions being met,” the news release stated.

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The bank reported adjusted earnings per share of CAD$1.77 (CAD$1=US$0.75 cents) in the quarter ended October 31, up eight per cent, but marginally below the average forecast by analysts of $1.79 per share.

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For the full year, Scotiabank reported a seven per cent increase in earnings at its Canadian business to CAD$4.4 billion.

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Additional reporting by the Jamaica Observer

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