Remain calm as Republic’s application to acquire Scotia is reviewed – ECCB

The Monetary Council of the Eastern Caribbean Central Bank (ECCB) is encouraging citizens and residents of the Eastern Caribbean Currency Union (ECCU) to remain calm and exercise patience as the ECCB reviews the application from Republic Financial Holdings to acquire Scotiabank’s business in the ECCU.

In a release issued December 18, the ECCB said it received an application on Tuesday, November 27, from Republic Financial Holdings (RFHL) seeking regulatory approval to acquire the Bank of Nova Scotia’s operations and businesses in the Eastern Caribbean Currency Union (ECCU).

The Monetary Council met on 7 December via videoconference to discuss the most recent development in the ECCU banking sector – the planned withdrawal of Scotiabank.

In addition to an earlier written briefing, the Governor of the ECCB, Timothy N. J. Antoine, updated the Council on the process since receipt of the Republic’s application. Already, the ECCB has prepared and submitted a detailed list of information requirements to RFHL to facilitate the review.

ECCU Countries Will Await the Findings and Recommendation of the ECCB

The Monetary Council noted that pursuant to Section 43 of the Banking Act, the approval of the ECCB is required for the transfer of operations from Scotiabank to Republic. The ECCB, as regulator, will undertake a thorough review after which it will determine whether to approve the transfer.

The Monetary Council will now await the outcome of the ECCB’s review process, which may take several months, and will involve engagement with other regulators.
During this process, the Council encourages the public to be calm and patient.

Local Ownership of Banks Encouraged

The Council agreed that it was highly desirable to have more local ownership of banks, provided these banks have strong capital, strong management and good corporate governance. To that end, more functional cooperation and consolidation among national banks is essential if they are to effectively compete with regional and international banks, grow their market share, and help propel the development of the ECCU.

The High Backing of the EC Currency Will Continue

The ECCB is clear and resolute about its mandate to protect the EC dollar. The Council received assurances from the Governor that the Bank will continue to maintain high levels of reserves as it has done for the past 35 years, whether or not the proposed transaction is approved. At present, the backing of the EC dollar in foreign reserves is 98 per cent.