Michelle Fran­cis-Pan­tor, Deputy In­spec­tor of Fi­nan­cial In­sti­tu­tions at Cen­tral Bank has said while lo­cal fi­nan­cial in­sti­tu­tions have been look­ing out­side T&T to merge with or ac­quire oth­er com­pa­nies re­gion­al and in­ter­na­tion­al fi­nan­cial in­sti­tu­tions how­ev­er, have been look­ing at T&T as a lu­cra­tive mar­ket.

She al­so not­ed over the last five years there has been an uptick in merg­ers and ac­qui­si­tions in the re­gion.

Speak­ing at a we­bi­nar host­ed by the Cen­tral Bank yes­ter­day Fran­cis-Pan­tor not­ed that in terms of re­cent ac­qui­si­tions in the bank­ing sec­tor, the first quar­ter of 2021 has on­ly re­cent­ly end­ed and al­ready two ac­qui­si­tions have been con­clud­ed.

The first be­ing the sale of as­sets of the East­ern Caribbean sub­sidiaries of the Cana­di­an-owned, T&T based RBC Fi­nan­cial Caribbean Ltd, to a con­sor­tium of in­dige­nous banks in the East­ern Caribbean.

The sec­ond was the ac­qui­si­tion of In­di­an-owned Bank of Bar­o­da by lo­cal ANSA Mer­chant Bank Ltd.

Fran­cis-Pan­tor al­so added that over the last few years Re­pub­lic Group al­so made ac­qui­si­tions in the re­gion, adding that in 2019 it ac­quired the ma­jor­i­ty share in the Cay­man Na­tion­al Cor­po­ra­tion.

In that same year the Group ac­quired Sco­tia’s op­er­a­tions in sev­er­al East­ern Caribbean coun­tries.

She said there were al­so four ac­qui­si­tions of in­sur­ance com­pa­nies in 2019; Guardian Hold­ings Ltd was ac­quired by the Ja­maican-owned NCB Fi­nan­cial Group, Sagi­cor Fi­nan­cial Cor­po­ra­tion was ac­quired by Cana­di­an firm Align­vest, Mo­torOne had two ac­qui­si­tions-Ja­maican-owned Gen­er­al Ac­ci­dent In­sur­ance Com­pa­ny and T&T Mi­con Mar­ket­ing Ltd, and Be­con In­sur­ance Com­pa­ny was ac­quired by Bermu­da-based Colo­nial Group In­ter­na­tion­al now known Coral­isle Group Ltd.

Fran­cis-Pan­tor said how­ev­er, that not all pro­pos­als for merg­ers and ac­qui­si­tions have been suc­cess­ful or have at­tained reg­u­la­to­ry ap­proval.

These in­clude the ac­qui­si­tion of Sco­tia­bank Guyana by RHFL in 2019 which was not ap­proved by the Bank of Guyana due to con­cerns around sys­temic risks and mar­ket con­cen­tra­tion.

“Giv­en that had the trans­ac­tion tak­en place Re­pub­lic would have had over 50 per cent own­er­ship of the as­sets and de­posits of the Guyanese fi­nan­cial sec­tor,” Fran­cis-Pan­tor ex­plained.

She al­so not­ed that the pro­posed ac­qui­si­tion of Sco­tial­ife by Sagi­cor was ter­mi­nat­ed by mu­tu­al agree­ment and a pro­posed sale of a ma­jor­i­ty stake of FCIB by Colom­bian-owned GMB Group did not at­tain reg­u­la­to­ry ap­proval.

Gen­er­al­ly, Fran­cis-Pan­tor said reg­u­la­tors do not open­ly dis­close rea­sons for ob­jec­tions but may opt to do so when there is a pub­lic in­ter­est con­cern such as the po­ten­tial for sys­temic risks or the po­ten­tial im­pact on com­pe­ti­tion.

She added that fi­nan­cial in­sti­tu­tions pur­sue merg­ers and ac­qui­si­tions for sev­er­al rea­sons in­clud­ing adding val­ue to a com­bine en­ti­ty or group which in turn, is ben­e­fi­cial to share­hold­ers, in­crease mar­ket share or ac­cess to new mar­kets which leads to the abil­i­ty to di­ver­si­fy prod­ucts and of­fer­ings and con­tribute to growth and di­ver­si­fi­ca­tion in as­sets and in­come, cre­ate op­por­tu­ni­ties for growth par­tic­u­lar­ly whether there is lim­it­ed room for or­gan­ic growth in ex­ist­ing mar­kets and they are a medi­um to ob­tain ad­di­tion­al staff and qual­i­ty skills or buy a brand to grow the busi­ness that would oth­er­wise be dif­fi­cult to at­tract or de­vel­op.

The Cen­tral Bank has de­vel­oped a draft merg­ers and ac­qui­si­tions guide­line which was pub­licly is­sued yes­ter­day for con­sul­ta­tion.

It is avail­able on the bank’s web­site at; https://www.cen­tral-bank.org.tt/core­func­tions/su­per­vi­sion