Georgetown: Republic Bank Limited (RBL) on Wednesday announced plans to acquire Royal Bank of Canada’s Suriname operations from RBC Financial Caribbean Limited, through the purchase of Royal Overseas Holdings St Lucia Limited, at an estimated cost of US$39.8 million.
In a release, RBL said a Share Purchase Agreement, executed Monday, signalled the commencement of the transaction, which was subject to all regulatory and other customary approvals. The transaction is expected to be completed in the coming months.
RBL Managing Director David Dulal-Whiteway said that this acquisition fitted in perfectly with the Bank’s regional expansion strategy and once completed, will increase RBL’s footprint in the Caribbean to eight territories.
Canada’s largest bank in contrast has been pulling out of some of its operations in the Caribbean Region. The Financial Times reported that early last year, RBC agreed to sell its Jamaican operations to Sagicor Group Jamaica Ltd. It also said in November it was shutting down its international client wealth management business in the Caribbean.
According to Dulal-Whiteway, “As a Caribbean-based bank, we are always on the lookout for opportunities in the Region. Suriname’s diverse and stable economy makes it an attractive investment territory and one that we have been desirous of entering since 2012. We view this opportunity to acquire Suriname’s third largest bank as a solid entry point into that market.”
RBC Royal Bank (Suriname) NV operates a six-branch network with assets of approximately US$525 million (as at October 31, 2014) and an employee complement of 199 persons.
The transaction will be accretive to RBL shareholders (adds to earnings per share) and upon completion of the acquisition, Republic Bank intends to rebrand the newly-acquired subsidiary in Suriname. By drawing on its proven track record of adding value to the markets it enters through the enhancement of customer experience, Republic will make available to the Surinamese market a wide array of products and services, as well as access to its wealth of banking expertise. This includes commercial and retail as well as merchant and corporate banking.
RBC Caribbean Banking Head Rob Johnston said, “Following a thorough and careful review of RBC’s Suriname operations, we concluded that the best decision for the long-term future success of the operations was to sell it to a strategic buyer with interest in building a presence in Suriname. Republic Bank, which also has operations in neighbouring Guyana, is exactly such a partner.”
According to Reuters, Canada’s largest bank Dulal-Whiteway added, “We are excited about the prospect of this acquisition as we work toward achieving our vision as the Caribbean financial institution of choice. We look forward to partnering with the team in Suriname, using our successful business model that relies on the local knowledge supported by well-trained employees, effective policies, processes and governance structures, to deliver excellence in customer satisfaction, employee engagement and social responsibility, while building successful societies.”
RBL is one of the largest and most successful independent commercial banks in the English-speaking Caribbean, having served the Region for 177 years. Today, the Republic Bank Group operates 70 branches, with an approximate staff complement across the Region of 4100 people.
The Trinidad and Tobago Stock Exchange listed company as of September 30, 2014, had assets of US$9.4 billion, with equity at US$1.4 billion and profits attributable to shareholders for the year ended September 30, 2014, of US$189.1 million.
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