Jun 2015 Financial News

Republic Bank restructures

Jun 04, 2015

REPUBLIC Bank yesterday announced a restructuring. Effective October 1, Republic Bank Limited will become a holding company known as Republic Bank Financial Holdings Limited. The bank said this move was necessary to ensure it remains relevant in a changing business environment.

Managing Director, David Dulal-Whiteway said Republic Bank Limited has been operating both as a bank and as the holding company for 16 subsidiaries. 

He said the bank has been expanding rapidly through acquisitions, an arrangement which he said can sometimes become “blurry” and the bank thought it was a good time to make the change in structure to separate the responsibilities of the bank from the responsibilities of the holding company.

Changing to a holding company will mean the vesting of the local bank and its assets into its wholly-owned subsidiary Republic Finance and Merchant Bank Limited (FINCOR). Dulal- Whiteway said it will be a seamless transition because following the vesting, the company will change FINCOR’s name to Republic Bank Limited. 

“So our customers in Trinidad and Tobago will still be dealing with Republic Bank Limited and this will have no impact on the relationships with the bank that currently exist.” 

The other change will be in the name of the bank from Republic Bank Limited to Republic Bank Financial Holdings. 

Dulal-Whiteway said the changes will not affect shareholders and will have no effect on the bank’s customers. 

He said the changes will have to be approved by all the bank’s regulators and it will have to get final approval from its shareholders in an extraordinary general meeting scheduled for June 26. Corporate Secretary Jacqueline Quamina, said the expansion of the bank required a rethinking of its structure “to ensure it can manage the risks, make sure our governance structure is intact and also have the necessary strategic focus. We have to remain relevant to our societies,” she said, adding that “to remain relevant, change is inevitable hence the decision to form a holding company Republic Bank Financial Holdings Limited.” 

Dulal-Whiteway reminded journalists that the bank a few months ago completed its acquisition of 57 percent of the shareholding of HFC Bank in Ghana and is proceeding with its takeover of RBC’s operations in Suriname, which he said should be completed sometime early next month. 

He said, “Our objective has always been to be the bank of the Caribbean which could then move outside of the region. When we look at the Caribbean region, I don’t think we represent all the areas as yet, so if there are opportunities we will be willing to look at them.” However, he said at this time, the bank’s focus is in the region and what it is doing in Africa. 

“I would think that our Africa strategy is one which is very long term rather than a short-term strategy and it is really positioning ourselves for long-term growth so when I think of it I think of Africa as really 20 to 25 years down the road where we think that will be and where we will be within that structure,” Dulal-Whitewhay stated. “Actually 25 years is a short period of time for an organisation that is 178 years old and I normally try to compare it to Guyana which we invested in in 1997 and back then I think a lot of people had concerns as to why we were going into Guyana but we did foresee good growth potential in that economy and we invested back in 1997.” 

He continued, “Guyana has done very well for us over the years and that is also one of the reasons why we are also very interested in Suriname because when we look at Guyana, Suriname and Trinidad and Tobago, I think that triangle will also be much more involved from a business community development point of view because we have similar resource-rich countries exciting opportunities and potential and I think we are well positioned as an organisation to take the lead there and be the banker for all the activities and business that is going to be taking place in all three countries.” 

He said the Suriname economy is very similar to Guyana, “they have gold, they are expanding their oil production and there is also an interest in agriculture.” 

He said the economy of Suriname, like Guyana, has performed very well. 

“Its Gross Domestic Product growth has been about four percent over the last several years, so if you compare it to the English-speaking Caribbean, you find that both Guyana and Suriname have done very well,” Dulal Whitewhay added. 

Source:
By VERNE BURNETT
Newsday
Thursday June 4, 2015

http://www.newsday.co.tt/business/0,212152.html