First Citizens planned purchase of Scotiabank’s Guyana operations has failed.
On Thursday, the Bank put out a legal notice confirming the deal was off. The deal was initially announced in March last year.
The notice stated, “The Purchase and Sale Agreement between First Citizens Bank Limited and the Bank of Nova Scotia (Scotiabank) for the sale of Scotiabank’s retail operations in Guyana expired and the agreement has been terminated in accordance with its terms.”
The statement continued, “First Citizens remains resolved to advance our geographic diversification and digital transformation strategies. These efforts will increase our shareholder value by active progression of all strategic options to expand our core commercial banking and other lines of business into new markets and territories while we continue to deliver digital products, channels and services to the markets that we serve.”
It is not the first time a Trinidad and Tobago Bank has found difficulty closing such a deal, in 2019 the Bank of Guyana blocked the sale of Scotiabank Guyana’s assets to Republic Bank.
There were early indications that this deal was not favoured as both Guyana’s Minister of Finance and the Bank of Guyana criticised the announcement of the sale by Scotiabank last year.
Guyana’s Finance Minister Dr Ashni Singh had said Scotiabank’s announcement was “premature and inappropriate” as he pointed out that section 12 of the country’s Financial Institutions Act stated “no financial institution may transfer the entire or a substantial part of its operations without prior approval from the Bank of Guyana.”
The minister said then, “Considering that the laws of Guyana require this process, we consider it premature to announce a transaction of this nature, particularly given that the regulatory process to consider the request for any such transaction is yet to be initiated, much less to be concluded.”
The Bank of Guyana in response to Scotia’s announcement of the deal, made it known that FCB “entered the said agreement without informing the BOG.”
The BOG also stated First Citizens’ Bank did not have a licence to operate in Guyana.
“FCB has not submitted an application, in keeping with the requirements of the Financial Institutions Act 1995 (FIA), to the BOG to acquire control of a bank (BNS) operating in Guyana,” the BOG said in a statement after the deal was announced in March 2021.