May 2009 Financial News

Still the best fit

May 21, 2009

“This alliance comes at a time when customers need, more than ever, to feel secure about the stability of their banking institutions,” he said at the official opening of RBC’s new Caribbean headquarters at St Clair last week.

The US$2.2 billion transaction saw the creation of a regional financial institution that spans 18 countries across the Caribbean with assets totalling US$13.6 billion.

“Across the globe, we are seeing countries moving from relative strength to structural weakness and companies challenged by softening markets and persistent uncertainty,” he said.

In this environment, Sookoo said RBTT felt good to be a part of RBC because “our Canadian parent has been able to withstand these challenges, largely because of a history of prudent risk management and a well-managed and diversified portfolio.

“For us, the most important change occurred on June 16, 2008 when RBC acquired RBTT,” Sookoo said. The merger was sealed on that day, three months after RBTT shareholders held a special meeting at the Hilton Trinidad to cast a 98.18 percent vote in favour of the amalgamation of both companies on March 26.

Before the merger took place, RBTT was granted approval to suspend the trading of its shares in accordance with the regulations of the TT Stock Exchange and the Jamaica Stock Exchange.

Following the merger, the RBTT Group reduced its staff in its various Caribbean jurisdictions by 500 persons. Sookoo said then that those reductions were not a result of the merger

He added that RBC was able to generate over Canadian $4.5 billion in earnings in 2008 and Canadian $1 billion in the first quarter of this year. Sookoo declared that it was on this foundation, “that we in the Caribbean propose to build the region’s premier financial services organisation, leveraging global expertise to service all our customers’ needs.

“In essence, we now offer the best of two worlds. The strength of Canada’s number one bank and the warmth and traditions of the Caribbean.”

Sookoo said as part of its integration with RBC, RBTT is now in the process of introducing banking models geared to taking on more of the market.

“Once we have completed the merger of RBC Caribbean and RBTT, we will manage an intricate network of close to 130 branches equipped to deliver financial products, services and advice to more than 1.6 million clients across the Caribbean. In the coming months, you will begin to feel this wave of change touching both you and your business.” Sookoo added that with Trinidad and Tobago aiming to become the region’s financial centre, Port-of-Spain was the clear choice to serve as the hub of RBC’s Caribbean enterprise.

RBC Group head (international banking and insurance) Jim Westlake said, “If nothing else, the financial crisis that started last fall has reinforced the importance of being associated with a strong, global player and is something that we believe will serve us well as we continue to take advantage of new opportunities and build our business together.”

He added that the combined RBC/RBTT operations make them the second largest banking group in the English-speaking Caribbean, advancing their overall strategy of international growth, including pursuing high growth markets such as the Spanish Caribbean, Central and South America.”

With almost 30 percent of RBC’s revenue being generated from outside Canada, Westlake stated, “This acquisition wasn’t just about what RBTT brings to RBC but also RBC’s contribution to RBTT.” Westlake explained that RBC’s acquisition of RBTT “was all about giving us the infrastructure and the resources to grow in this region in a way we wouldn’t have been able to otherwise.

“With operations that are twice the size of RBC’s existing Caribbean business, a strong branch network that complements our existing locations and strong positions in key markets, including TT, one of the Caribbean’s strongest economies, we are now well-positioned for expansion.”

In delivering the feature address, Prime Minister Patrick Manning observed it was instructive that both Canada and TT have been able to avoid the severest consequences of the international financial crisis which has devastated financial institutions.

The Prime Minister said TT will continue to learn from the Canadian experience because it “provides us with working examples of the policies and approaches that are required to minimise risk whilst taking advantage of the opportunities that derive from the flow of capital across borders in our globalised world.”

Stating that all of the country’s economic plans will kick in “with full force” once the crisis ends, Manning said, “Very significant levels of financing will obviously be needed to fuel this tremendous growth in all areas of the economy that will surface in TT and spread to the rest of the region.”

With a new wave of industrialisation now brewing, the Prime Minister said the country will need stronger financial institutions as a result and pointed to the TT International Financial Centre.

“The Government recognises the investment as a statement of confidence in the economic future of TT and the region,” Manning said of the RBC deal.

RBC new Caribbean headquarters consists of a seven-storey building on St Clair Avenue which is linked to a six-storey building on Sweet Briar Road. The headquarters covers 132,000 square feet of land and includes three levels of basement parking to accommodate 350 cars.

Source: Trinidad Newsday
http://www.newsday.co.tt/businessday/0,100596.html
Article by: Clint Chan Tack
Date: 21-05-09