Sale of Scotiabank could have anti-competitive effect in three member states -CARICOM Commission

PARAMARIBO, Suriname –The Suriname-based Caribbean Community (CARICOM) Competition Commission says the intended sale of Scotiabank’s assets in nine Caribbean countries could have anti-competitive effects in at least three CARICOM member states.

“The Commission remains cognisant of the provisions of Article 175 of the RTC (Revised Treaty of Chaguaramas) and at this time reminds national competition authorities and member states of this critical provision,”it said in a statement.

“The Commission also informs that it shall approach those national competition authorities and sector regulators in affected member states in accordance with Article 176(1), for the conduct of preliminary examinations of proposed transaction between the enterprises,” it also noted.

Last November, the Trinidad-based Republic Financial Holdings Limited announced that it was seeking to acquire Scotiabank operations in several Caribbean countries.

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.

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.

In its statement, the commission recalled that last December it had advised the public that it had taken note of the announcement regarding the proposed sale as well as the life insurance operations in another two territories, namely Jamaica and Trinidad and Tobago, to Sagicor Financial Corporation.

“In accordance with Article 173(2)(a) of the RTC, the Commission further advised that it would continue to monitor these developments in the banking and insurance sectors and that any impact to the CARICOM Community by the proposed transaction would be assessed in accordance with the provisions of the RTC.”

It said that it has “now completed a preliminary assessment pursuant to Article 173(2)(a) of the RTC” and that “such assessment indicates that the proposed transaction or parts thereof could possibly have  anti-competitive effects in at least three member states in the Community.”

The statement did not name the states but said that “in furtherance of its commitment to fair and transparent processes for both the business community and consumers” it will  “continue to monitor this activity in the Community and will inform as appropriate on further progress of this matter in affected member states.”

Last week, Antigua and Barbuda Prime Minister Gaston Browne, who has openly expressed reservations about the sale, reiterated his government’s position that it would not issue a vesting order to facilitate the sale of Scotiabank operations in his country.

Browne told legislators that workers at Scotiabank had brought several issues to the attention of his administration including the issue of severance payments.

“In the case of Antigua and Barbuda, and by the way, we are not giving Scotiabank any vesting order. They are not getting it. We are very firm on that. However, in the unlikely event they were successful in selling this Antiguan branch to Republic Bank, they will have to pay the severance…

“We are giving the staff options, the right to exercise options of taking the severance and continue to work, take the severance and leave or if they wish to commute their service. The employee must have that right. It’s his labour. It is his fundamental right to determine for whom he works,” Browne said.