The Bank of Scotia has been around for not just years but for centuries. Dating back to 1889, this institution charted waters from its original home where it was founded in Halifax, Nova Scotia and expanded into the Caribbean region, first opening a branch in Kingston, Jamaica.
According to the company website, “it was the first branch of a Canadian bank to open outside the United States or United Kingdom and formed the basis of what would become a thriving network spanning some 25 countries throughout the Caribbean and Central America — a footprint that established Scotiabank as the largest bank in the region and a continent-wide enterprise.”
With that tid-bit of history, many Caribbean-Americans can now have a clear understanding of why the bank is so important to the region. There is definitely concern that at least nine Caribbean countries, including Antigua and Dominica, will see a change in their day-to day banking by 2019. The Bank of Nova Scotia is selling off some of its locations, as they focus of larger markets.
News releases from the bank has made it clear that they plan to sell the Caribbean businesses in those countries to Republic Financial Holdings Ltd. Based out of Trinidad and Tobago. All of this is contingent on regulatory approvals and closing conditions. Republic Financial said in its own press release said that the purchase price is US$123 million.
Furthermore, Scotiabank announced Tuesday that its subsidiaries in Jamaica and Trinidad and Tobago are moving forward with selling their insurance operations to Sagicor Financial Corporation Ltd. Located in Barbados. They will also underwrite insurance products for Scotia’s banking subsidiaries.
The bank started to make some changes as far back as November of 2014. They closed about 120 international branches, primarily in Mexico and the Caribbean to “reduce overlapping after acquisitions and focus on high-growth areas.” And they have continued to make changes over the past 4 years, the overhauling plans have not stopped.
“Exiting these non-core operations is consistent with a strategy that began five years ago to sharpen our focus, increase scale in core geographies and businesses, improve earnings quality and reduce risk to the bank,” said Brian Porter, President and CEO of Scotiabank during a conference call Tuesday morning, adding that the bank has now either exited or announced its intentions to exit more than 20 countries or businesses over that same period.”
“Due to increasing regulatory complexity and the need for continued investment in technology to support our regulatory requirements, we made the decision to focus the bank’s efforts on those markets with significant scale in which we can make the greatest difference for our customers,” said Ignacio Deschamps, the head of international banking at Scotiabank, in a release.
Some of the older generation who have had accounts with Scotiabank felt concerned about whether or not this well-established bank is paving the way for others to pull out of the region. Dennis Maddix was willing to share his thoughts. “It’s amazing that after all of these years they are turning their backs on the smaller markets like the Caribbean,” stated Maddix. “I do realize that we are living in different times, a time when businesses do not consider themselves to be successful unless they are outpacing their competitors in profits. Things have changed. There is no more loyalty to your customers. It is all about chasing down the almighty dollar. Scotia Bank wants to run off to establish banks in Mexico and South America. I wish them well – thanks for the memories, he said sarcastically. This where my family had all of their accounts.”
Maddix is right about Scotia Bank wanting to increase its market share in South America. They are forecasting that growth in some Latin American countries will outpace Canada.
Cynthia Hall another person who was previously a customer had this to say: “People in smaller countries don’t really have much of a choice when it comes to banking, not like we do here in the United States. I can’t imagine how this must feel to employees and customers who have relied on this bank for their finances and their livelihood. Being unemployed in the islands is no joke because most of those people do not have unemployment or severance,” she continued. “Caribbean people take comfort in knowing that you will not be left hanging. Another bank that is looking to grow will value your business and skills. They will step in to take their place. Scotia Bank will more than likely look back with regret in a few years.”