The Royal Bank of Canada (RBC) is selling its Jamaica holding to Sagicor Group (Jamaica) Financial Ltd.
In a release yesterday, Canada’s largest financial institution said the sale was “consistent with its strategy” of being a competitive leader in the markets in which it operates.
“We determined after a careful and thorough review that the best decision for the long-term future success of RBC Jamaica was to sell it to Sagicor. Sagicor is a well established financial franchise in Jamaica with the size, scale and complementary capabilities that RBC Jamaica does not currently possess,” said RBC Caribbean chief executive officer Suresh Sookoo.
Financial terms of the transaction were not disclosed. But RBC expects the transaction to result in an estimated loss of Can$60 million (TT$360 million — before and after tax — as a result of international financial reporting standards, largely related to an estimated writedown for the proportionate share of RBC Jamaica goodwill and other intangibles from RBC’s acquisition of RBTT Financial Group in 2008.
The transaction is subject to customary closing conditions, including regulatory approvals and is expected to be finalised in the coming months.
“This transaction will allow us to successfully reposition our Caribbean business for the future and focus on regions where we have significant market share. We are focused on strengthening our business performance, service and competitiveness in markets where we can be a leading competitor over the long term,” said Dave McKay, group head, Personal and Commercial Banking, RBC.
RBC will release its first quarter 2014 results and host an earnings conference call on February 26.
Richard Byles, president and CEO of Sagicor Group Jamaica, said the move “provides the opportunity to expand Sagicor’s banking footprint” to better serve customers.
“The acquisition of RBC Jamaica is a critical step in fulfilling our vision to build a bank that is based on customer satisfaction and convenience, and we have confidence in RBC Jamaica’s dedicated employees to help deliver this vision. This transaction allows us the opportunity to have a substantial distribution network and to provide value added services to our clients through more branches and ATM locations island wide,” Byles said.
Sagicor Group Jamaica is a financial services conglomerate with business in Jamaica, Cayman Islands and Costa Rica.