On March 26, 2008, some 98 per cent of the shareholders of RBTT Financial Holdings, voting at a special meeting at the Trinidad Hilton, approved the acquisition of the Trinidad-headquartered bank by the Royal Bank of Canada (RBC) for the princely sum of $13.7 billion (US$2.28 billion). The transaction led to the amalgamation of RBTT Financial Holdings and the Caribbean operations of RBC, with the Canadian powerhouse paying the local and regional shareholders of RBTT Financial $24 per share in cash, representing 60 per cent of the consideration, with the balance being paid in RBC shares. While the transaction attracted some opposition, at the end of the day the overwhelming majority of the shareholders voted to be purchased by the largest banking institution in Canada and one of the top 20 most powerful banks in the world. The acquisition marked the resumption after 21 years of RBC's presence in T&T, where it had maintained operations for 85 years from 1902 to 1987.
At the time of the closing of the transaction on June 16, 2008, the bank that was created had a presence in 18 countries and territories across the Caribbean, with about US$13.7 billion in assets and some 7,000 employees serving more than 1.6 million clients. The RBTT Financial shareholders-who would have included thousands of individuals and scores of mutual funds and pension plans across the Caribbean-voted to be acquired, having access to the information generated by the vigorous debate on the issues that were thrown up by the acquisition. In a sense, the shareholders were presented with a choice of their bank remaining a large fish in the small pond of the Caribbean or becoming a small part of a very large, supremely well run global enterprise. It is a statement of fact, which the Canadians should take some pride in, that RBC managed to weather the global financial meltdown, which had its genesis in the sub-prime mortgage market in the US, by sticking to the fundamentals of good banking and avoiding some of the excesses indulged in by their neighbours to the south and across the Atlantic.
Yesterday, the bank began the phased implementation of its new brand-RBC Royal Bank-across its footprint in the Caribbean with a ceremony at its St Clair Avenue Caribbean head office.
In the next year, the bank's RBTT operations from Jamaica in the north to Suriname in the south and its existing RBC operations in The Bahamas, Cayman Islands, Turks and Caicos, Barbados and the Eastern Caribbean will all have to change their signage, their letterheads, ATMs to reflect the new name and the new brand. This is a massive undertaking that will be led, in the main, by Caribbean nationals who will be directed from the regional headquarters in Port-of-Spain by RBC Royal Bank's astute group chief executive, Suresh Sookoo. RBC Royal Bank's 1.6 million clients across the Caribbean must surely have an expectation that the rebranding will signal a significantly higher level of customer service, the introduction of appropriate technologies that will make their banking easier and, most critically, that the parent company will use its scale in the Caribbean to reduce the margins between deposit and lending rates. We would like to issue the following challenge to RBC Royal Bank: The only way to answer the critics of the acquisition while fully justifying the faith placed in you by the shareholders who voted in March 2008, would be to create a bank that delivers its services better, faster and cheaper than its competition. The nature of competition is that such a bank would drive product innovation, foster new ways to serve the customer and stimulate the entire banking industry in the Caribbean to deliver services better, faster and cheaper. May the best bank win!