Photo: Caribbean 360

Scotiabank announced on Monday that it is shutting shop in Anguilla, Antigua and Barbuda, Dominica, Grenada, Guyana, St Kitts and Nevis, St Lucia, St Maarten, and St Vincent and the Grenadines, and has entered an agreement with Trinidad-based financial group Republic Financial Holdings Limited (RFHL) to purchase its banking operations in those “non-core markets” for US$123 million.

But Antigua and Barbuda’s Prime Minister Gaston Browne announced yesterday that he has advised the Eastern Caribbean Central Bank (ECCB) – which has regulatory responsibility for banks operating in Antigua and Barbuda’s domestic financial space – that his government will not be issuing a vesting order to facilitate the bank’s divestment of its Antigua holdings to RFHL.

Meantime, the Ministry of Finance in Guyana said in a statement that the proposed sales agreement raises a number of issues for the banking sector and for the public which the Ministry, the Bank of Guyana and the Government of Guyana will need to carefully consider.

It noted that Republic Bank currently holds 35.4 per cent of the banking systems assets and 36.8 per cent of deposits and the acquisition will increase this to 51 per cent of both assets and deposits.

“This raises concerns about an over-concentration of banking services, market domination and the ‘too big to fail’ risks,” it said.

“The Scotiabank decision, which is made when Guyana’s economy is on the cusp of financial transformation with the onset of a massive new oil and gas sector raises concerns and is regretted,” the Ministry added.