By Elesha George
It’s been three days since the Eastern Caribbean Amalgamated Bank (ECAB) legally took over the Antigua franchise of the Bank of Nova Scotia/Scotiabank, and already the government has big plans for the future of the financial institution.
On Thursday, Prime Minister Gaston Browne told Observer that his government intends to sell citizens some of its ownership in the local bank. There are also plans to list ECAB on the Eastern Caribbean Stock Exchange, exposing it to a wider selection of investors and financing.
Browne said the government is likely to convert its 25 per cent preference shares to ordinary shares. The Antigua Commercial Bank (ACB) also has 15 per cent shares in ECAB which will increase the government’s combined ownership to 40 per cent.
The prime minister considers this to be one step closer for the people in Antigua and Barbuda to preside over their own development and a greater revenue injection for the government through dividends.
Boasting a billion-dollar asset base, Browne believes that ECAB has the potential to earn $20 million a year in profit with its latest buyout of the Canadian Bank.
“That is a substantial investment in a small island developing economy,” he said, adding that “twenty million dollars retained in this economy, if it’s retained earnings for the bank and or dividends paid to shareholders, you’re talking about $200 million in a period of a decade”.
Meanwhile, Browne feels vindicated after being ridiculed for refusing to issue a vesting order to Trinidad-based Republic Financial Holdings Limited (RFHL) which acquired seven of the nine Scotiabank franchises in the Eastern Caribbean in 2019.
Antigua and Barbuda was also expected to be part of the acquisition, however the prime minister insisted that indigenous banks be given the first right of refusal in the sale of Scotiabank.
His stance was that domestic banks were too small to sustain themselves but with expansion, he believed they would stand a better chance in improving the country’s banking system.
“We would have achieved the consolidation of the two banks notwithstanding many, including Directors of Scotiabank to do otherwise, and as you know too, we had some political pushback here in Antigua and Barbuda. In fact, our political opponents had argued that it can’t be done and that it was not the right thing to do. We even had some sub-regional pushback as well but we literally soldiered on and we were successful in getting the sale completed and now ECAB is the proud owner of the Bank of Nova Scotia Bank,” he gloated.
ECAB’s operations has now expanded to six branches and 23 automated machines islandwide.