Jul 2014 Financial News

Royal Bank takes $10b hit on Jamaican operation

Jul 04, 2014

Royal Bank of Canada will book losses of CDN$97 million after tax, which translates to more than $10 billion in Jamaican currency, on the disposal of its local banking network.

The bank sold RBC Royal Bank Jamaica and its non-trading subsidiary RBTT Securities Limited to Sagicor Group Jamaica for $9.5 billion, a price that Royal Bank said was about equivalent to the Jamaican asset's book value. The transaction closed at the end of June.

Royal Bank initially announced an expected charge of CDN$60 million on the RBC sale, but said on June 27 that the loss has been upsized by CDN$37 million.

The latter estimate "includes an unrealised loss on foreign-currency translation".

The bank says the losses will be reflected in its July third-quarter results due for release next month. A conference call on the results is scheduled for August 22.

The disclosures by the Canadian bank tracks with central bank data on RBC Jamaica, which disclosed accumulated deficits of $10.24 billion up to March 2014.

Sagicor said it acquired the bank debt free. Its assets total $52 billion, according to industry data from the Bank of Jamaica.

Sagicor began rebranding the network on Monday to Sagicor Bank to align with its existing network, and aims to integrate the technology platforms of both operations within a year. The merged entity controls $77 billion of assets and $38 billion of loans, making it the third-largest of now six commercial banking groups.


Source:
business@gleanerjm.com
Jamaica Gleaner
Friday July 4, 2014

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