PORT OF SPAIN, Trinidad – CARICOM’s cartel-busting watchdog may eventually have its say on looming changes to the region’s banking and insurance landscape, the agency announced Tuesday.
The Caribbean Community Competition Commission said it was watching “with concern” the plans by Trinidadian banking conglomerate Republic Financial Holdings Inc to acquire Canadian giant Scotiabank’s operations in nine Caribbean countries.
The Commission said it noted the concerns of bank customers and governments across the region regarding the proposed acquisition – a $246 million (US$123 million) banking deal with Republic Financial to sell operations in Anguilla, Antigua and Barbuda, Dominica, Grenada, Guyana, St Kitts & Nevis, St Lucia, St Maarten, and St Vincent & the Grenadines.
Scotiabank also announced that its Scotia Life Insurance business in Jamaica and Trinidad & Tobago would go to a new Sagicor company, following a deal by Toronto-based firm Alignvest, to acquire Sagicor Financial Corporation.
Both deals are subject to regulatory and other approvals.
The CARICOM Competition Commission said in a statement it was closely monitoring the developments, while pledging to help member states in analyzing the effects of the proposed acquisition.
The Commission said the deals also underscored the need for the strengthening of national and regional competition rules.
“The Commission advises that it shall continue to monitor these developments in the banking and insurance sectors. Any impact to the community market by the proposed acquisitions will be assessed in accordance with the Revised Treaty of Chagauramas,” the Commission said in a statement.
“The Commission takes this opportunity to highlight the need for strong national and regional competition rules and frameworks. Despite the need for these regulatory tools, the Commission stands ready to support the member states of the CSME and financial sector regulators in analyzing the competition effects of the proposed acquisitions in their respective national or sub-regional jurisdictions,” it added.
The CARICOM Competition Commission was established by Article 171 of the Revised Treaty of Chaguaramas, with a mandate to promote and protect competition within the community.
The Commission said it remained committed to a process “that is fair and transparent in the determination of any regulatory matter where the interests of both business and consumers must be considered”.
So far, the government of Antigua and Barbuda said it was disappointed that Scotiabank would decide to sell its operations there without any consultation with regulators or the finance ministry, while describing the move as “unacceptable”.
The letter, which was signed by Prime Minister Gaston Browne said “should the Bank of Nova Scotia wish to divest its operations in Antigua and Barbuda, it would be necessary to seek the government’s approval. In this connection, my government would strongly recommend that such divestment should be offered first to local banks as the priority.
“Indeed, I am aware that notwithstanding the unexpectedness of Bank of Nova Scotia’s announcement, a consortium of such banks has already expressed an affirmative interest to acquire.”
Scotiabank defended its decision to exit some Caribbean markets, saying that the bank was ”just re-focussing on the markets with size and scale”.