BNB, Republic Bank of T&T seek alliance

www.barbadosadvocate.com Web Posted - Mon Mar 17 2003

WHEN CIBC and Barclays Bank PLC completed their merger last year, it virtually set in motion the start to changes in the local banking industry.

That process now seems to be picking up speed with talks of a strategic arrangement between the Barbados National Bank and Republic Bank of Trinidad and Tobago.

Financial sources told Business Monday that there are a couple of issues that would favour the BNB going for a strategic partner.

“The first is that the face of banking in Barbados is not only changing but that the competition is becoming tough,” one analyst indicated.

He recalled that the creation of FirstCaribbean International the entity out of the merger of CIBC and Barclays Bank PLC is a large bank.

“That bank has with assets of US$10 billion that effectively made it the largest bank on the island,” the source said. However, the other players like Royal Bank and Scotiabank with their foreign base, give them the depth to be significant players in this market, according to an economist.

“Secondly, the Caribbean Single Market and Economy (CSME) is going to provide new opportunities and challenges for banks, and the BNB has to be in a position to capitalise and benefit from those opportunities,” the economist said. Though it has been performing well over the past few years, the BNB might still be unable to match what these “giants” are able to do.

“By ... seeking a strategic partner the BNB’s is effectively becoming more dominant in the industry.”

“With several businesses in Barbados as well as Government seeking foreign financing the opportunity is there for capitalising on such activities,” it was pointed out to Business Monday.

“So there are synergies to be gained from the arrangement.” Republic Bank’s assets stand at well over TT$10.7 billion and in 1996, the bank showed after tax profits of TT$136 million. Republic employs over 2 000 people in Trinidad and Tobago.

With a well established branch network and the reputation as the premier bank in Trinidad and Tobago, Republic Bank Limited has expanded its operations beyond its home base, and positioned itself as the leading financial services institution in the Eastern Caribbean.

The bank’s major subsidiary in Trinidad and Tobago is Republic Finance & Merchant Bank Limited (FINCOR). For the purpose of large scale property development, the London Street Project Company Limited was developed in 1995 as a subsidiary to FINCOR.

Republic Bank was actively establishing subsidiaries in 1992. That year the bank and Grupo Acedo-Mendoza established Acedo-Mendoza Fincor C.A., a confirming house with offices in Venezuela and Colombia as well as Trinidad. Also in 1992, Republic established Republic Bank Trinidad and Tobago (Cayman) Limited, a wholly-owned offshore bank with registered offices in the Cayman Islands. Before the close of the year, Republic Bank Limited purchased a 51 per cent shareholding in the National Commercial Bank of Grenada Limited, a commercial banking operation with eight branches on the islands of Grenada, Carriacou and Petite Martinique.