Scotiabank is going to exit nine Caribbean countries by selling off its operations to a Port of Spain-based financial services firm The Republic Financial Holdings for US$123 million, with the Canadian bank’s chief blaming the sale on the growing need to invest in technology as part of complying with what he called a “complex” regulatory system.
The agreement will bring an end to Scotiabank’s more than a century old operations in the Caribbean countries of Anguilla, Antigua, Dominica, Grenada, Guyana, St. Kitts & Nevis, St. Lucia, St. Maarten, and St. Vincent & the Grenadines.
“Due to increasing regulatory complexity and the need for continued investment in technology to support our regulatory requirements, we made the decision to focus the Bank’s efforts on those markets with significant scale in which we can make the greatest difference for our customers,” said Ignacio (Nacho) Deschamps, Group Head of International Banking at Scotiabank.
In a separate deal, the Canadian bank has reached in agreement with the Sagicor Financial Corporation to spin off its insurance business in Jamaica and Trinidad & Tobago. Together, they will now set up an insurance sales entity to sell what they call “more enhanced” insurance solutions to customers.
“Scotiabank is proud to work with the Republic Group and Sagicor – both leaders in financial services in the Caribbean who are well positioned to invest and grow these businesses,” Deschamps added.
As part of the agreement, Scotiabank employees in the nine countries will join the Republic Group, and the employees of Scotia Jamaica Life Insurance Company and ScotiaLife Trinidad and Tobago will join Sagicor.
Scotiabank has operations in 22 countries around the world, including Peru, Chile, Colombia, and Mexico, which alone account for nearly a quarter of its revenue.
In a conference call with analysts, the bank’s Chief Executive Officer, Brian Porter, has confirmed that he has no plans to exit Latin American countries, where the bank has also built several innovation labs to bolster its technology assets.