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Financial News

Apr 2015 Financial News

RBL to buy RBC Suriname for US$39.8m

Apr 02, 2015

Republic Bank Limited (RBL) yesterday announced plans to acquire RBC Royal Bank (Suriname) NV from RBC Financial (Caribbean) Limited at an estimated cost of US$39.8 Million. A share purchase agreement, executed on Tuesday, signalled the commencement of a transaction that is subject to all regulatory and other customary approvals. The transaction is expected to be completed in the coming months.

RBL’s managing director David Dulal-Whiteway said the acquisition fits in perfectly with the bank’s regional expansion strategy and once completed, will expand RBL’s footprint in the Caribbean to eight territories. “As a Caribbean-based bank, we are always on the lookout for opportunities in the region. Suriname’s diverse and stable economy makes it an attractive investment territory and one that we have been desirous of entering since 2012.

“We view this opportunity to acquire Suriname’s third largest bank as a solid entry point into that market,” Dulal-Whiteway said in a statement. “We are excited about the prospect of this acquisition as we work toward achieving our vision as the Caribbean financial institution of choice. We look forward to partnering with the team in Suriname, using our successful business model that relies on the local knowledge supported by well-trained employees, effective policies, processes and governance structures…”

RBC said the sale of the Suriname operations will not have a material impact on its capital ratios, but it will result in a loss of US$18.2 million), largely due to writedowns tied to goodwill and other intangibles. It said the loss will be reflected in its results for the second quarter ending April 30, which are set to be released on May 28. RBC Royal Bank (Suriname) NV operates a network of six branches with assets of approximately US$525 million, as at October 31, 2014, and an employee complement of 199.

“This transaction supports the successful repositioning of our Caribbean business for the future and allows us to focus on markets where we can strengthen our operational capabilities and where we see opportunities for growth,” said Kirk Dudtschak, executive vice-president and head, RBC Caribbean Banking. Early last year, RBC agreed to sell its Jamaican operations to Sagicor Group Jamaica Ltd. It also announced in November that it was shutting down its international client wealth management business in the Caribbean.

Rob Johnston, Head, RBC Caribbean Banking, said: “Following a thorough and careful review of RBC’s Suriname operations, we concluded that the best decision for the long-term future success of the operations was to sell it to a strategic buyer with interest in building a presence in Suriname. Republic Bank, which also has operations in neighbouring Guyana, is exactly such a partner.”

RBL operates 70 branches throughout the region, with an approximate staff complement of 4,100 people. As at September 30, 2014, its assets stood at US$9.4 billion, with equity at US$ 1.4 billion and profits attributable to shareholders of US$189.1 million.

 

Source:
Trinidad Guardian
Thursday April 2, 2015

http://www.guardian.co.tt/business/2015-04-02/rbl-buy-rbc%E2%80%88suriname-us398m