BLOW for THE REGION

Governor of the Central Bank of Barbados, Cleviston Haynes, has weighed in on the proposed sale of Scotiabank’s operations in nine Caribbean countries and the multimillion dollar agreement that Sagicor Financial Corporation Limited has struck with Canadian firm Alignvest, to acquire its shares and take over its operations.   

Responding to a question from moderator David Ellis during the question and answer session at yesterday’s Barbados Chamber of Commerce and Industry’s Business Luncheon at the Hilton Hotel, Haynes said while the decisions are understood somewhat from the standpoint of the companies, the potential impacts on the region cannot be ignored. He made that point more so as he alluded to the negative impact that the Scotiabank move could have on the Caribbean.

“What we have in the Caribbean generally are very small presences and to be successful globally really needs critical mass, and I suspect that that is part of the decision making that Sagicor may have made in coming to their decision. ...Banking in the region, particularly post the financial crisis, has not been seen as being very profitable particularly for some of the Canadian banks, who see significant risks, but perhaps don’t see the type of returns which they would want to make. I think that this is perhaps a slightly unfortunate development for the region,” he said.

The Central Bank boss’ comments came as he explained that as it relates to banking, the region has benefited both throughout the global financial crisis and more recently with the de-risking initiatives that have been introduced, from having these large Canadian banks in our presence. He added that while the banks do not always operate as we would like, and there is often criticism about the fees they charge, he still is of the firm belief that regional economies have gained from those banks choosing to operate here.

“…Therefore there must be a little concern, where as a region there appears that we are beginning to lose some of these banks and therefore it is something we have to look at very carefully. But we also have to recognise it in the context of the global repositioning of large corporate entities,” he stated. (JRT)