CHANGES in the banking industry everywhere invoke public discussions about the merits or demerits of a move – and whether it makes dollars or sense.
Such debate followed the sale here of what was once regarded as The National Bank to a non-Saint Lucian entity, the closure of and transition from Barclays Bank PLC, the twinning of regional and extra-regional banks and the expansion of competitive services between local, regional and international banks operating here.
Same with the decision by many banks to start to charge customers for services that were earlier free, including requests for statements of account and conducting transactions on behalf of relatives. And ditto when banks started to either charge non-account holders to cash cheques or simply refuse to cash cheques issued by account holders to non-account holders.
Today, thanks to new rules and regulations, even opening an account for the first time has become an onerous bureaucratic exercise requiring everything from more than one form of ID to having to declare sources of income and declaration of origin of deposits beyond certain amounts.
More recent public outrage has been growing here too around the realization that external factors increasingly affect local banking — from threats of ‘Delisting’ to the uncomfortable realities of the consequences of Caribbean banks engaging in transactions involving cash legally earned from marijuana-related employment in Canada, which qualifies as illicit earnings and ‘proceeds of crime’ in regional jurisdictions.
Then came this week’s surprises — Scotiabank-Republic and Sagicor-Alignvest acquisition schemes that no one saw coming.
This move is bigger than just big, involving financial institutions worth billions moving hundreds of millions of dollars with a few proverbial strokes of the pen. But everyone – from shareholders to governments to regulators – only learned of it through a series of coordinated press releases and paid advertisements.
Reactions have been swift. The governments of Guyana and Antigua and Barbuda have expressed strong feelings about the implications of the moves and complained about not being either informed or consulted. The OECS Central Bank (ECCB) has also been informed by Antigua and Barbuda that it will not sign the required Vesting Order to facilitate the transaction. (See related item on this page)
The Saint Lucia Government has been so far quiet on the issue (at least up to press time yesterday). But Opposition leader Philip J. Pierre has joined many others across the region calling for institutional and regulatory responses to guide such giant money moves and protect the interests of all stakeholders.
The discussions and debates will continue, even though it is not expected that the deal will be reversed. Conducted in total secrecy and with major strategic intent, the deals involved will result in Scotiabank ownership changing in nine Caribbean territories while the parent company rearranges itself to strengthen its asset base.
Thanks to the sloth of gubernatorial responses to regional and international events with implications for the Caribbean region and nations, local banks have been responding rather slowly to the fast changes involving banking and the globally-expanding marijuana industry. In this regard, local branches of Canadian banks stand better-placed to cash in on the speedily-growing global marijuana industry than indigenous banks, even though all are under the umbrella of local laws.
In the case of the Scotia-Sagicor-Alignvest move, indigenous, local banks and financial institutions, both private and public, will most likely seek some form of government response that will somehow require that such big money moves be conducted with more transparency, especially when they involve nations and customers across united boundaries.
But in the end, even the banks, institutions and individuals concerned will tell you that in today’s world of crypto currencies and mega capital and finance, the biggest moves are usually the most silent, even though the noises they cause can and will always sound louder.
As the popular song says, ‘That’s just the way it is.’