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ANSA Bank now at the Furness Building, Independence Square, Port-of-Spain.

Michelle Francis-Pantor, Deputy Inspector of Financial Institutions at Central Bank has said while local financial institutions have been looking outside T&T to merge with or acquire other companies regional and international financial institutions however, have been looking at T&T as a lucrative market.

She also noted over the last five years there has been an uptick in mergers and acquisitions in the region.

Speaking at a webinar hosted by the Central Bank yesterday Francis-Pantor noted that in terms of recent acquisitions in the banking sector, the first quarter of 2021 has only recently ended and already two acquisitions have been concluded.

The first being the sale of assets of the Eastern Caribbean subsidiaries of the Canadian-owned, T&T based RBC Financial Caribbean Ltd, to a consortium of indigenous banks in the Eastern Caribbean.

The second was the acquisition of Indian-owned Bank of Baroda by local ANSA Merchant Bank Ltd.

Francis-Pantor also added that over the last few years Republic Group also made acquisitions in the region, adding that in 2019 it acquired the majority share in the Cayman National Corporation.

In that same year the Group acquired Scotia’s operations in several Eastern Caribbean countries.

She said there were also four acquisitions of insurance companies in 2019; Guardian Holdings Ltd was acquired by the Jamaican-owned NCB Financial Group, Sagicor Financial Corporation was acquired by Canadian firm Alignvest, MotorOne had two acquisitions-Jamaican-owned General Accident Insurance Company and T&T Micon Marketing Ltd, and Becon Insurance Company was acquired by Bermuda-based Colonial Group International now known Coralisle Group Ltd.

Francis-Pantor said however, that not all proposals for mergers and acquisitions have been successful or have attained regulatory approval.

These include the acquisition of Scotiabank Guyana by RHFL in 2019 which was not approved by the Bank of Guyana due to concerns around systemic risks and market concentration.

“Given that had the transaction taken place Republic would have had over 50 per cent ownership of the assets and deposits of the Guyanese financial sector,” Francis-Pantor explained.

She also noted that the proposed acquisition of Scotialife by Sagicor was terminated by mutual agreement and a proposed sale of a majority stake of FCIB by Colombian-owned GMB Group did not attain regulatory approval.

Generally, Francis-Pantor said regulators do not openly disclose reasons for objections but may opt to do so when there is a public interest concern such as the potential for systemic risks or the potential impact on competition.

She added that financial institutions pursue mergers and acquisitions for several reasons including adding value to a combine entity or group which in turn, is beneficial to shareholders, increase market share or access to new markets which leads to the ability to diversify products and offerings and contribute to growth and diversification in assets and income, create opportunities for growth particularly whether there is limited room for organic growth in existing markets and they are a medium to obtain additional staff and quality skills or buy a brand to grow the business that would otherwise be difficult to attract or develop.

The Central Bank has developed a draft mergers and acquisitions guideline which was publicly issued yesterday for consultation.

It is available on the bank’s website at; https://www.central-bank.org.tt/corefunctions/supervision