FirstCaribbean Bank remains functional for now
BASSETERRE, St. Kitts - THE proposed US$797 million sale of First Caribbean operations to the Gilinski Group out of Colombia has been withdrawn after it did not receive the necessary approvals from regulators in the region.
Announcement of the withdrawal was made Tuesday (Feb. 2) morning by the parent company of First Caribbean, the Canadian Imperial Bank of Commerce (CIBC).
In 2019, it was announced that the GNB Financial Group Limited moved to purchase majority stake in FCIB - 66.73 percent of the share in the regional entity for $797 million, pending the necessary approvals from regulators in the region.
CIBC in a media statement disclosed that the “previously announced transaction to sell a significant portion of its majority stake in CIBC FirstCaribbean ("FirstCaribbean") to GNB Financial Group Limited did not receive approval from FirstCaribbean's regulators”.
Group Head, Capital Markets, Harry Culham, who also oversees FirstCaribbean, said, "While this transaction would have supported FirstCaribbean's long-term growth prospects, it is only one way of creating value for stakeholders."
He added:"FirstCaribbean is focused on building deep, long-lasting client relationships in the Caribbean, optimizing our business, and enhancing efficiency over time. We remain committed to executing on our long-term strategy and delivering the best outcome for clients, shareholders, team members and communities."
Sources at the FCIB’s regional head office in Bridgetown confirmed the sale was off, noting that many were happy when the announcement was made internally.
Concerns were expressed when the initial announcement was made that the Colombian entity had made moves to purchase the financial institution, leaving many to speculate about the reasoning behind that initiative.
However, financial experts indicated that the proposed sale of the FCIB pointed to the growing concerns Canadian financial institutions have with their operations, including the issues surrounding de-risking.
Just recently, one Bank of Nova Scotia/ScotiaBank transitioned to Trinidad and Tobago-Headquartered Republic Bank following its sale to the Republic Financial Holding in several territories across the region.
Meanwhile, the sale of Royal Bank of Canada in five territories in the Eastern Caribbean is awaiting regulatory approval after a proposed sale to a consortium of regional financial institutions, including the Bank of Nevis.
