By Shanieka Smith

Features Writer

#Guyana, June 25, 2022 – For the second time in three years, a planned deal has failed between Scotiabank Guyana and Trinidad and Tobago in First Citizens Limited.  Last week, First Citizens issued a legal notice to inform that the Purchase and Sale Agreement between First Citizens Limited and the Bank of Nova Scotia for the sale of Scotiabank’s retail operations in Guyana expired. The agreement was terminated.

However, this time, it is revealed that the Bank of Guyana denied the transaction out of concern that Republic Bank would gain a near-monopoly position in the Guyanese banking sector.

President of the Georgetown Chamber of Commerce & Industry, Timothy Tucker, said, “If the Republic bank, Scotia Bank merger was done, it would have over 50 percent of the depository…so that is why that deal was rejected.”

He added that “Republic bank had made an attempt to buy Scotia Bank Guyana and like any regulator, in any jurisdiction anywhere in the world, if a bank is then going to, if the acquisition of a bank is going to create a monopoly or something that can be detrimental to the depository institutions, then you will have a problem.”

The First Citizens, Scotia Guyana deal received backlash from regulators when it was announced in March 2021. Guyana’s Minister of Finance, Dr Ashni Singh, and the Bank of Guyana have both criticised the announcement.

“The announcement] was premature and inappropriate, said Minister Singh back then. The Bank of Guyana said FCB, “entered the said agreement without informing the BOG.”

Last year, the lapse caused institutions and business people in the region, especially Guyana, a considerable amount of money.

Tucker said the announcement had raised alarms around the business community and added that a local institution in Guyana, the Bank for Trade and Industry, placed a higher offer for Scotiabank, and Scotia Bank went with First Citizens. While he is uncertain of the reason for that, he said that if the agreement were successful, two Trinidad banks would control over 50 percent of the depository institutions within Guyana.

Tucker made it known that Trinidad and Tobago banks are not blacklisted; the Republic Bank remained the largest bank in Guyana. He added that he would welcome more Trinidad and Tobago banks in Guyana since it only has a few banking institutions. The only issue is that the banks must enter independently and not at the expense of foreign banks like Scotia.

“So the local private sector, while we are advocating hard for our more financial institutions, we don’t mind First Citizens applying for a banking license and coming in as a regional bank, but when we are going to lose one of our international banks to a regional bank, the business sector has a problem with that,” he said,” We don’t control the process. Even if we have a problem with that, it’s a free capital market. Companies are free to sell to whomever they choose to sell. We support that. But at the same time, we are worried about the concentration of our depository institutions into the region alone. This isn’t going for Trinidad banks; it goes for if a bank from Jamaica came to buy Scotiabank. We would fundamentally have an issue with it,” he said.

First Citizens Bank said it would continue to pursue “geographic diversification and digital transformation strategies.” In the meantime, Tucker is hoping it will open other opportunities for Guyana.