The St. Vincent and the Grenadines government has welcomed the announcement by a consortium of banks in the Eastern Caribbean Currency Union (ECCU) that it had entered into a definitive agreement to acquire the branches and banking operations of the CIBC FirstCaribbean in four Caribbean islands.
The four members of the consortium – The Bank of St. Vincent and the Grenadines Ltd., The National Bank of Dominica Limited; Grenada Co-operative Bank Limited; and St. Kitts-Nevis-Anguilla National Bank Limited, said that the agreement is subjected to regulatory approval and customary closing conditions.
According to its website, CIBC FirstCaribbean was formed in 2002 with the merger of CIBC West Indies Holdings and Barclays Bank PLC Caribbean operations. In December 2006, CIBC acquired Barclays stake and became the majority shareholder in FirstCaribbean.
“Our clients and our employees across the Caribbean will continue to benefit from the long-term investment that CIBC is making in the Caribbean – a history that dates back to our first branches opened in 1920,” the bank said.
Prime Minister Dr. Ralph Gonsalves, speaking on a radio programme of his ruling Unity Labour Party (ULP) on Tuesday night, said the local bank will benefit significantly from the acquisition.
“The current market share in terms of loans and advances for Bank of St. Vincent is 52 per cent, but when we add, after the acquisition of CIBC we will be almost about 67 per cent moving from EC$670 million to over EC$832 million and so they will add about EC$160 million in loans and advances.
“In deposits, our current share is about 49 per cent , when you add the CIBC it will be nearly 72 per cent to approximately EC$1.6 billion. So you are going to have total assets there of what is now 51 per cent market share for Bank of St. Vincent that would rise to 67 per cent or EC$1.8 billion.
Gonsalves said that he was pleased with the restricting exercise undertaken at the local bank prior to the acquisition adding “we would not have been able to grab some of CIBC”.
He said the deposit customers at the Bank of St. Vincent is just over 40,000 and the estimated amount for CIBC is between 15 and 20,000.
“That means combined the estimates would be between 55 and 60, 000 deposit customers which basically by this acquisition will be touching the lives of practically every Vincentian in the country,” he added.
“This is a huge issue and you notice we kept it quite confidential and quiet,” he said, praising the teams involved in the negotiations.
The acquisition expands the consortium’s loan base by more than EC$600 million (One EC dollar=US$0.37 cents) net, the deposit portfolio by EC$1.5 billion, and provides the additional scale to better service the consortium’s respective communities and contribute to the region’s economic and social advancement, according to a statement issued here.
It said that the consortium looks forward to working with CIBC FirstCaribbean to finalise the transaction over the coming months with both working diligently to ensure the transition is seamless for all stakeholders.
Until regulatory approvals are obtained and the transaction closes, operations at all institutions will continue as they currently do.
“The consortium members are committed to recruiting staff of CIBCFirstCaribbean, as required, to maintain and even improve the level and quality of service that CIBCFirstCaribbean customers are accustomed to.”
“As at June 30, 2021, the consortium members held an aggregate deposit base of EC$6.4 billion representing a 53 per cent market share in their combined markets.
Source-CMC
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