The much-touted plan by Canadian bank CIBC to sell most of its shares in the Barbados-based CIBC FirstCaribbean International Bank has been shot down by Canadian regulators.
The Canadian Imperial Bank of Commerce (CIBC), which owns the majority stake in CIBC FirstCaribbean, announced in November 2019 that it had agreed to sell a large portion of its holding in the bank to GNB Financial Group Ltd for $1.59 billion (US$797 million).
But reports out of Canada on Wednesday indicated that corporate regulators have refused to approve the mega-deal. Had the green light been given, it would have resulted in CIBCFCIB giving up its Canadian control to GNB Financial, owned by Colombian billionaire Jaime Gilinski.
CIBCFCIB chief executive officer Colette Delaney said in a statement to Canadian media: “While this transaction would have supported FirstCaribbean’s long-term growth prospects, it is only one way of supporting growth for our bank going forward.
“CIBC has held a majority ownership stake in FirstCaribbean for a number of years, and there exists an excellent working relationship with a shared focus on meeting the needs of our clients.”
Under the proposed deal, GNB would have owned 66.7 per cent of FirstCaribbean’s equity, while CIBC would have retained 24.9 per cent.
CIBC FirstCaribbean is the region’s largest bank, operating in 16 countries in the Caribbean, has 2,900 employees in 64 branches and offices.
GNB Financial is wholly owned by Starmites Corporation, the financial holding company of the Gilinski Group, which has about $30 billion (US$15 billion) in combined assets.
Gilinski had said in an earlier statement regarding the proposed buyout of the regional bank: “FirstCaribbean will remain the strong entity it is today, committed to servicing its clients in the region. I have been impressed by the strength and stability of FirstCaribbean and am excited about its prospects for the future.” (IMC1)
