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Jun 22, 2020

Scotiabank Belize to be Sold to Belize Bank Ltd.

We start our newscast tonight with big financial news. The biggest single investment at this time of the COVID pandemic was announced this morning. Caribbean Investment Holdings, the parent company for the Belize Bank, announced it will be acquiring Scotia Bank Belize, which has been on the market for some time, pending final regulatory approval.  The sale is part of a regional refocusing by the Canadian bank. The transaction amounts to upwards of thirty million U.S. dollars and when completed, will expand the footprint of the Belize Bank in the banking sector.   In the meantime, assurances have been given that Scotia employees are not being affected.  Here is News Five’s Isani Cayetano with a report.

 

Isani Cayetano, Reporting

Fifty-two years after opening its first local office in Belize, Scotiabank, along with its nine branches across the country, is being sold to a new owner.  This morning, news of a pending acquisition was confirmed by Lyndon Guiseppi, Executive Chairman of the Belize Bank Limited.

 

Lyndon Guiseppi

Lyndon Guiseppi, Executive Chairman, Belize Bank Ltd.

“One of the strategic goals of the Belize Bank for quite a while has been to expand our regional operation and to become a regional banking franchise.  So it has been a number of years now in which we have been looking at acquisitions across the Caribbean.  Over the last thirteen months, the opportunity was presented to us when Scotiabank was deciding to leave the jurisdiction and we engaged in discussions with Scotiabank over the past thirteen months.  These negotiations were on again, off again negotiations and finally they consummated in us signing a deal on Friday.”

 

That business transaction was carried out between Caribbean Investment Holdings and Scotiabank Caribbean Holdings, parent companies for the Belize Bank and Scotiabank Belize, respectively.  The move to sell off its assets is part of a regional withdrawal being undertaken by Scotiabank.  It is following the lead of several other lending institutions that have also pulled out of the Caribbean.

 

Michael Ashcroft

Lord Michael Ashcroft

“They’ve all been withdrawing from the Caribbean basin and even in Belize here, one has to bear in mind that we’ve had the Royal Bank of Canada that has disappeared, Barclays Bank and now Scotia and this is being repeated throughout the Caribbean and so it was inevitable at some point of time that Scotia would want to consolidate its interest in other geographic areas and didn’t want to remain anywhere in the Caribbean.”

 

C.I.H.L. has agreed to pay up to thirty and a half million U.S. dollars for the acquisition of Scotiabank Belize which includes shareholder equity of twenty-eight point five million dollars and a premium of one point five million dollars.  Departure notwithstanding, the multinational banking and financial services company is still on a solid footing as it looks to invest in other international markets.

 

Lyndon Guiseppi

“It is perhaps the best capitalized bank in the financial system, Scotiabank.  So there is no question about the strength and stability of Scotiabank, it’s a very strong financial operation.  What you have was a very strategic decision by Scotiabank in Toronto to exit the Caribbean.  In the last year, for instance, Scotiabank has sold all of their operations in the Eastern Caribbean.  They are currently in negotiations to sell their operations in Guyana and also in Antigua and I know a month ago they also sold their operations in the British Virgin Islands.”

 

The Central Bank of Belize, as financial regulator, is aware of the purchase agreement between both companies.

 

Joy Grant

Joy Grant, Governor, Central Bank of Belize

“The Central Bank has been duly notified officially of an agreement for the acquisition of all the shares of Scotiabank Belize by Caribbean Investment Holdings Limited, the parent company of the Belize Bank Limited.  This agreement will, in effect, represent an eventual merger of these two domestic banking institutions.  To be absolutely clear, while the transaction is commercial in nature between two private companies, it is the Central Bank’s overarching interest, indeed our sacred mandate to safeguard the monetary and financial systems stability and to protect the Belizean dollar for the wellbeing of Belize.”

 

It’s arguably the single largest investment to be made in Belize amid the COVID-19 pandemic and its resulting economic collapse.

 

Lord Michael Ashcroft

“For Belize Bank, in this post-pandemic world that we are about to come into, I feel it’s very important that one: that I’m prepared to make a substantial investment in the country at this point of time when foreign investment coming into Belize is at probably its lowest ever.  And secondly, to be able to have a financial institution here that can weather the storm and work closely with the government in order to operate in the best interest of all stakeholders, not just the shareholders of the ultimate parent company of Belize Bank, but the nation, the various sectors and so I am looking forward to that.”

 

What present employees of Scotiabank can take comfort in going forward is job stability.  While a merger is inevitable, members of staff have been assured that there is presently no plan to make anyone redundant.

 

Lyndon Guiseppi

“We have committed to Scotiabank that the staff of Scotiabank would continue to work for Scotiabank at least for the next twelve to fourteen months after the acquisition takes place.  After that period of time we’re obviously going to try to integrate the two organizations to ensure that we can get the synergies that we’re looking at, but there is no intention at this stage for any sort of retrenchment and attrition of staff at Scotiabank.”

 

Reporting for News Five, I am Isani Cayetano.


Viewers please note: This Internet newscast is a verbatim transcript of our evening television newscast. Where speakers use Kriol, we attempt to faithfully reproduce the quotes using a standard spelling system.

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