In a report last month, launched at Lloyds of London during the visit of the Colombian President Juan Manuel Santos, the Oxford Business Group opined that Colombia only stands to benefit from...
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RBC sells Jamaica operations to Sagicor
The Royal Bank of Canada (RBC) will sell its banking and stock trading businesses in Jamaica to Sagicor Financial Corporation, the bank confirmed in a statement from Toronto, Canada, yesterday. RBC announced that it “has entered into a definitive agreement to sell RBC Royal Bank (Jamaica) Ltd and RBTT Securities Jamaica Ltd (collectively RBC Jamaica) to Sagicor Group Jamaica Ltd”.
The value of the sale was not revealed but the statement said the transaction is subject to customary closing conditions, including regulatory approvals and is expected to be finalised in the coming months. In 2008, RBC paid a Peter July-led board a record-setting US$2.2 billion for RBTT. It was the largest acquisition in the history of the English-speaking Caribbean.
“While financial terms of the transaction were not disclosed, the purchase price approximately reflects the book value of RBC Jamaica,” RBC said. As at June 30, 2013, the Bank of Jamaica reported that RBC Jamaica had total assets of JA$53.444 billion, approximately US$500 million.
“Consistent with our strategy of being a competitive leader in the markets where we operate, we determined after a careful and thorough review that the best decision for the long-term future success of RBC Jamaica was to sell it to Sagicor,” said Suresh Sookoo, chief executive officer of RBC Caribbean. “Sagicor is a well-established financial franchise in Jamaica with the size, scale and complementary capabilities that RBC Jamaica does not currently possess.”
The Sagicor Group suffered an overall net loss of US$13.3 million at the end of the first half of 2013, according to results released simultaneously in Port-of-Spain and Bridgetown on August 23, 2013. For the comparable period in the first half of 2012, Sagicor posted a net profit of US$11.8 million.
Toronto-based Dave McKay, RBC’s group head for personal and commercial banking, who has been named to succeed incumbent global RBC CEO Gordon Nixon in August, said: “RBC has operated in the Caribbean for over 100 years and remains committed to this region.
“This transaction will allow us to successfully reposition our Caribbean business for the future and focus on regions where we have significant market share. We are focused on strengthening our business performance, service and competitiveness in markets where we can be a leading competitor over the long term.”
RBC said it expects the transaction to result in an estimated loss of CA$60 million as a result of international financial reporting standards, largely related to an estimated writedown for the proportionate share of RBC Jamaica goodwill and other intangibles acquired by RBC in connection with its acquisition of RBTT Financial Group in 2008. The loss is based on current estimates and is subject to change and will be reflected in the results of the first quarter ending January 31, 2014, the bank said.
RBC is Canada’s largest bank and one of the largest in the world, based on market capitalisation. RBC employs approximately 79,000 full- and part-time employees who serve more than 15 million personal, business, public sector and institutional clients through offices in Canada, the US and 44 other countries.