Linda Hutchinson-Jafar, Business Writer
Port-of-Spain-based RBTT Financial Holdings on Wednesday swiftly denied Caribbean-wide speculation that a buy-out of the financial institution was almost a done deal, though regional markets were still being affected by the reports.
"Absolutely not true," a senior official at the bank commented to the Financial Gleaner on condition of anonymity.
The bank also issued a denial to the Trinidad Express which reported Wednesday that two locally-based banks held discussions on a possible buyout of assets of the RBTT Group.
A similar statement promised to the Financial Gleaner did not materialise.
On the look-out
Quoting industry sources, The Express reported that both First Citizens Bank and Republic Bank held discussions on a possible buyout - with First Citizens expressing its interest in the acquisition of the RBTT Group's local assets and Republic Bank eyeing RBTT's foreign assets.
Those assets would include RBTT Bank Limited, the third largest of the six Jamaican commercial banks.
Republic Bank's managing director, David Dulal-Whiteway, was non-committal on whether such discussions took place, but said Republic was always on the look-out to strengthen its external holdings.
Dulal-Whiteway, however, said that he didn't think the Trinidad central bank would allow "a strict merger with RBTT, since merging many of their products would result in a 60 to 90 per cent market share" and "you'll end up in certain areas with something like a monopolistic position."
Closer attention
Rumours of an RBTT takeover has surfaced before, with the speculation last year into early January centering on FirstCaribbean International Bank (FCIB), a subsidiary of Canadian Imperial bank of Commerce (CIBC), as the interested buyer. Analysts began paying closer attention to the banks after persistent talk, in Kingston and Port-of-Spain, that FCIB was looking to purchase a 14 per cent stake in RBTT from Guardian Holdings as precursor to a merger.
The market also took note of a CIBC announcement in January that it was interested in more Caribbean acquisitions.
On Tuesday, the renewed "whispers of an inked 'RBTT buyout" - as one Kingston stockbrokerage noted - sent Guardian's stock tumbling on the Jamaica Stock Exchange, pulling the market down, and nudged FCIB up a cent.
On Wednesday, FCIB gained another $1.39 to $127.50 on sales of 8,000 units while its local subsidiary FCIB Jamaica gained $3.00 on sales of 1,000 units to close at $26.
RBTT and Guardian did not trade.
Recent comments by Jamaican billionaire investor and AIC chairman Michael Lee Chin - who last year gave up the day-to-day running of AIC to build out his international businesses - was also read by the market as his having an interest in buying into RBTT.
"We are open for business," Lee Chin told reporters in Port-of-Spain, the Trinidad capital. "We are a capital allocator. We're opportunistic. We love the Caribbean and we have money."
Lee Chin said the Barbados-based FCIB, which is now 92.49 per cent owned by CIBC, would be a rival to every financial services institution in the region.
"They are well financed; CIBC is awash with capital," said Lee Chin.
"They are bringing their wad of inexpensive capital to the Caribbean, which is good for the Caribbean. Yes, we see them as healthy and strong competition to us."
Strong performance
RBTT, with businesses across the Caribbean, continues to demonstrate strong performance and further growth as reflected in its nine-month earnings report to December 31, 2006.
The bank's pre-tax earnings of TT$863 million (J$9.4 billion; US$141 million) were seven per cent higher than the corresponding period in 2005, while the pre-tax profit of $283 million (J$3.1 billion; US$46.2 million) for the third quarter was a 10 per cent increase over the same period in 2005.
RBTT, which has an historical tie to Canada traces its history back to 1856, when the Union Bank of Halifax was incorporated in Halifax, Nova Scotia. A branch of Union Bank was opened in Port-of-Spain in 1902 and when, in 1910, its operations were bought out by the Royal Bank of Canada, the Port-of-Spain branch also changed hands.
By 1985, 100 per cent of the shareholding was in local hands, 21 per cent of which was purchased by bank staff. The Royal Bank of Trinidad and Tobago Limited assumed the role of a holding company as the group rapidly expanded and diversified within the regional financial services sector.
business@gleanerjm.com
