By Shermain Bique-Charles
Prime Minister Gaston Browne is advising the Eastern Caribbean Amalgamated Bank (ECAB) and the Antigua Commercial Bank (ACB) to consider taking over the local branch of CIBC FirstCaribbean International Bank (FCIB) when it goes up for sale here.
This after a Consortium of leading banks in the Eastern Caribbean Currency Union (ECCU) announced last week that it had entered into a definitive agreement to acquire the branches and banking operations of CIBC FirstCaribbean in Dominica, Grenada, St Kitts and Nevis and St Vincent and the Grenadines.
According to a statement, the agreement executed on October 12 is subject to regulatory approval and customary closing conditions.
The twin island state is not on that list, but Browne believes that the sale of the Antigua branch is imminent.
He said the directors of ECAB and ACB should not wait for FICB to be sold to a foreign entity.
“My understanding is that the four smaller branches within the OECS subregions…they have deals on these four branches. They do not have a deal on the branches in St Lucia or Antigua but one can speculate that they will sell the Antiguan and St Lucian banks.,” he said.
He said the only two banks that can afford to purchase CIBC FCIB in Antigua are ECAB and ACB.
“Our indigenous banks need to ready themselves for a possible acquisition …I am hoping that the management of these two banks are proactive enough to get on to the leadership of CIBC to start the negotiations and not to allow some external institution to start those negotiations,” he added.
Browne said the acquisition could take the form of a joint venture.
“I want to implore our bankers here … even if they have to do a joint venture, they should approach the directors of CIBC as soon as possible and should try and do a deal. I am always of the view that these assets should be controlled locally,” Browne added.
The CIBC First Caribbean said the latest acquisition by the Consortium represents a significant development in the evolution of the Banking System of the ECCU.
“Once approved by the regulators, we are very confident that it will lay the basis for further enhanced value creation in these economies and greater prosperity for our society,” the release said last week.
“This acquisition expands the Consortium’s loan base by more than XCD 600 million, net, the deposit portfolio by XCD1.5b; and provides the additional scale to better service the Consortium’s respective communities and contribute to the region’s economic and social advancement.”
The Consortium said it’s looking forward to working with CIBC FirstCaribbean to finalise the transaction over the coming months with both working diligently to ensure the transition is seamless for all stakeholders.
Until regulatory approvals are obtained and the transaction closes, operations at all institutions will continue as they currently do.