An­drea Perez-Sobers

Se­nior Re­porter

an­drea.perez-sobers

@guardian.co.tt

Re­gion­al bank­ing ex­ec­u­tives and share­hold­ers are view­ing the US$1.794 bil­lion agree­ment for But­ter­field Bank to ac­quire Cana­di­an Im­pe­r­i­al Bank of Com­merce’s 91.7 per cent stake in CIBC Caribbean Bank as a ma­jor shift in the Caribbean fi­nan­cial sec­tor.

The trans­ac­tion will com­bine the two bank­ing and wealth man­age­ment groups in­to an in­sti­tu­tion with ap­prox­i­mate­ly US$29 bil­lion in as­sets and sig­nif­i­cant­ly ex­pand But­ter­field’s com­mer­cial bank­ing pres­ence across the Caribbean, the Bermu­da-head­quar­tered fi­nan­cial in­sti­tu­tion said yes­ter­day.

In a joint re­lease is­sued yes­ter­day, the fi­nan­cial in­sti­tu­tions ex­pect the trans­ac­tion to strength­en cor­po­rate, per­son­al, and wealth man­age­ment ser­vices across the Caribbean and oth­er in­ter­na­tion­al fi­nan­cial cen­tres.

The deal re­mains sub­ject to reg­u­la­to­ry ap­provals and cus­tom­ary clos­ing con­di­tions, with com­ple­tion ex­pect­ed in the first half of 2027.

Re­spond­ing to ques­tions from Guardian Me­dia, CIBC Caribbean said the ac­qui­si­tion forms part of But­ter­field’s long-term ex­pan­sion strat­e­gy.

“Since But­ter­field’s 2016 list­ing on the New York Stock Ex­change, the com­pa­ny has suc­cess­ful­ly grown and en­hanced prof­itabil­i­ty through bank­ing and trust ac­qui­si­tions. The busi­ness has built a strong op­er­at­ing en­gine and is now ex­tend­ing that mod­el across ad­di­tion­al com­ple­men­tary mar­kets,” the bank said.

CIBC Caribbean said op­er­a­tions would con­tin­ue as nor­mal pend­ing com­ple­tion of the trans­ac­tion.

The bank al­so sought to re­as­sure em­ploy­ees amid con­cerns about pos­si­ble re­struc­tur­ing fol­low­ing the takeover.

“But­ter­field is com­mit­ted to the con­ti­nu­ity of CIBC’s Caribbean team with ex­ist­ing com­pen­sa­tion and ben­e­fits for all cur­rent CIBC Caribbean man­age­ment and em­ploy­ees,” the bank stat­ed.

It added that re­tiree ben­e­fits, pen­sion plans, and union agree­ments would re­main un­changed.

The bank fur­ther said branch­es and lo­ca­tions across the re­gion would re­main op­er­a­tional, in­clud­ing CIBC Caribbean’s re­gion­al head­quar­ters in Bar­ba­dos.

Af­ter the trans­ac­tion clos­es, the in­sti­tu­tion is ex­pect­ed to un­der­go a phased re­brand from CIBC Caribbean to But­ter­field.

CEO of the UWI Arthur Lok Jack Glob­al School of Busi­ness and for­mer CEO of But­ter­field Bar­ba­dos, Mar­i­ano Browne, de­scribed the ac­qui­si­tion as a sig­nif­i­cant repo­si­tion­ing move for But­ter­field.

“It gives But­ter­field a much wider foot­print,” Browne said.

He ex­plained that But­ter­field had tra­di­tion­al­ly been as­so­ci­at­ed with off­shore bank­ing and in­vestor-re­lat­ed fi­nan­cial ser­vices in ju­ris­dic­tions such as Bermu­da and the Cay­man Is­lands, but the ac­qui­si­tion now places the bank square­ly in main­stream com­mer­cial bank­ing across the Caribbean.

“This is re­al­ly a change in But­ter­field’s po­si­tion­ing be­cause it now picks up both a re­tail and a busi­ness port­fo­lio which spans the en­tire gamut of the re­gion, and prob­a­bly could make it the biggest bank in the re­gion,” Browne said.

He not­ed that But­ter­field’s list­ing on the New York Stock Ex­change dis­tin­guish­es it from the Cana­di­an banks op­er­at­ing through­out the Caribbean.

“It re­al­ly rep­re­sents a dif­fer­ent po­si­tion­ing and al­so a dif­fer­ent ap­proach to the busi­ness of bank­ing in the re­gion,” he added.

Browne al­so dis­missed sug­ges­tions that But­ter­field is un­fa­mil­iar with the Caribbean mar­ket, not­ing that the bank pre­vi­ous­ly op­er­at­ed in Bar­ba­dos be­fore ex­it­ing that seg­ment of com­mer­cial bank­ing.

“In fact, the bank that First Cit­i­zens bought in Bar­ba­dos was, in fact, But­ter­field,” he said.

He said the ac­qui­si­tion rep­re­sents a re-en­try in­to Caribbean com­mer­cial bank­ing and could in­ten­si­fy re­gion­al bank­ing com­pe­ti­tion mov­ing for­ward.

Browne al­so high­light­ed But­ter­field’s in­sti­tu­tion­al in­vestor base, not­ing that Black­Rock is among its ma­jor share­hold­ers.

For­mer man­ag­ing di­rec­tor of ANSA Mer­chant Bank, Robert Le Hunte, said the trans­ac­tion was not un­ex­pect­ed, giv­en CIBC’s grad­ual repo­si­tion­ing strat­e­gy in the re­gion.

“We have seen sim­i­lar strate­gic moves be­fore, in­clud­ing the di­vest­ment of cer­tain East­ern Caribbean op­er­a­tions, so this ap­pears to be part of a broad­er long-term repo­si­tion­ing strat­e­gy by the Cana­di­an bank­ing group,” Le Hunte said.

He not­ed that CIBC Caribbean re­mains one of the re­gion’s most sig­nif­i­cant fi­nan­cial in­sti­tu­tions, of­fer­ing re­tail, cor­po­rate, com­mer­cial, wealth man­age­ment, and in­vest­ment bank­ing ser­vices.

“The in­sti­tu­tion it­self rep­re­sents the evo­lu­tion and merg­er of the old Bar­clays op­er­a­tions with CIBC back in 2003, so this is a sig­nif­i­cant de­vel­op­ment for Caribbean bank­ing,” he said.

Mi­nor­i­ty share­hold­er ad­vo­cate Pe­ter Per­me­ll said many mi­nor­i­ty share­hold­ers ini­tial­ly re­act­ed with re­lief fol­low­ing con­fir­ma­tion of the long-ru­moured sale.

“It has been an open se­cret for some time now that CIBC Caribbean’s par­ent com­pa­ny in Cana­da had been shop­ping around its 91.7 per cent stake in the bank,” Per­me­ll said.

How­ev­er, he not­ed dis­ap­point­ment quick­ly fol­lowed over the of­fer price of US$1.14 per share, com­pris­ing 61 per cent cash and 39 per cent But­ter­field shares.

Per­me­ll not­ed that over the past 52 weeks, CIBC Caribbean shares trad­ed be­tween TT$7.76 and TT$9.00, while the fi­nal of­fer trans­lates to ap­prox­i­mate­ly TT$7.75 per share, rep­re­sent­ing a dis­count to the stock’s last trad­ing price of TT$8.20.

“This trans­lates in­to an un­wel­come dis­count of about TT$0.45 or cir­ca 5.5 per cent to its last trad­ing price,” he con­clud­ed.