Four OECS territories and Aruba up for sale
BASSETERRE, St. Kitts -- “Shocked and stunned” were the words sources said to have been uttered by personnel in the head office of CIBC FirstCaribbean Operation in Barbados when news broke of the sale of four OECS operations and Aruba.
This comes as management of the Bank’s operation sent out a circular informing of the sale shortly after 4:00 p.m. yesterday afternoon (Oct. 12) without prior notice, especially to those overseeing the Eastern Caribbean Operations.
The Bank, in a media statement to reporters, said that the FirstCaribbean International Bank Limited had announced that its wholly-owned subsidiary, FirstCaribbean International Bank (Barbados) Limited) would sell its assets in four OECS territories in St. Kitts and Nevis, St. Vincent and the Grenadines, Dominica and Grenada.
Those operations, it stated, would be sold to a consortium of local banks across the region, including, the Bank of St. Vincent and the Grenadines Ltd., Grenada Co-Operative Bank Limited, National Bank of Dominica Ltd, and St. Kitts Nevis Anguilla National Bank Ltd.
It further stated that the FCIB’s operations in Aruba have also been sold to Aruba Bank N.V.
However, despite those early sales talk, the full transaction is pending the approval of regulators who have to oversee the pros and cons of the sale.
This is the second time in as many years that FCIB International is seeking to dispose of operations in parts of the Caribbean.
In fact, the bank had its last sale to the Galinski Group blocked by the Eastern Caribbean Central Bank.
Bank sources told SKNVibes that following that failed sale, the financial institution might be in the market to sell its operations in smaller portions rather than the full operations as was previously untaken.
The application has yet to be sent to the regulators for the sale of the operations, but it is again raising concerns of the exit of the Canadian Banks from the region.
Economists and financial experts have posited that the sale shows that the threat of de-risking is of concern to international financial institutions operating within the region.
Two other Canadian financial institutions have already left St. Kitts and Nevis, and major markets of the Caribbean. Scotiabank was purchased by Republic Financial out of Trinidad and Tobago, while Bank of Nevis took over the operations of Royal Bank of Canada and Royal Bank of Trinidad and Tobago.
Financial experts are taking a close look at this specific sale, most notably in St. Kitts and Nevis, since the National Bank controls a large portion of the financial market which may raise concerns with the regulators of the “too big to fail” idea.