Linda Hutchinson-Jafar, Business Writer

RBTT branch in Half-Way Tree, St Andrew. - File

Royal Bank of Canada (RBC), three weeks ahead of a crucial vote by RBTT share-holders in Port-of-Spain, has given an assurance that no jobs will be cut when the deal with RBTT Financial Group is consummated mid-year.

Canada's largest bank is buying the retail banking operations of RBTT Financial for TT$13.7 billion (US$2.2 billion) under a deal that will see the merger of RBC's Caribbean operations with RBTT Bank.

In the past two years, said RBC head of Caribbean Banking, Ross McDonald, Royal Bank has grown its regional staff complement by 15 per cent. The idea, the bank's executives suggested during a media briefing in Port-of-Spain on Monday, was to remain focused on growth.

"No one will lose his or her job as a result of this acquisition," said Peter Armenio, RBC's head of US and international banking. "Without a doubt, this transaction is about expansion and growth."

The RBTT board has unani-mously recommended the US$6.33 per share merger deal on which shareholders will cast their vote on March 26.

The proposed transaction will create one of the most expansive banking networks in the Caribbean, giving Royal Bank a presence in 18 regional markets.

With more than US$13.7 billion in assets, the combined operations will have 130 branches across the Caribbean, with close to 7,000 employees serving more than 1.6 million clients.

Armenio said the deal will enhance the strong position built by RBC over decades in key Caribbean markets, particularly Barbados, The Bahamas and Cayman Islands.

"What this transaction does is provide RBC with extensive local insight and leadership in markets where we now have little or no presence while significantly advancing our overall strategy to grow internationally," said the RBC executive.

RBTT, he said, will provide RBC with immediate scale in major markets Trinidad & Tobago and Jamaica - countries it originally entered in 1911 but exited two decades ago - as well as the Dutch Caribbean.

RBTT, for its part, said it needed the type of partner that would position the bank to respond to emerging competition from corporations hunting markets worldwide.

Acting pre-emptively

"From our vantage point, the sweeping changes in the global financial services industry offered both opportunity and the imperative to change," said RBTT group CEO Suresh Sookoo.

"Advances in technology, new regulatory requirements, new accoun-ting standards, and what we call the internationalisation or merging of markets, has created more intense competition for market share and for scarce financial and human capital. RBTT needed to act pre-emptively," said Sookoo, who under the RBC takeover will become CEO of RBC's Caribbean retail banking operations to be headquartered in Trinidad.

In 2005, RBTT initiated a US$60 million project to expand and update its technology platform and standardise operations across all jurisdictions to yield efficiencies.

"Secondly, we sought a strategic partner to take RBTT into the next era and to ensure long-term success for our shareholders, employees and customers," added Sookoo.

Throughout the discussions between the parties on the acquisition, Armenio said it was clear to RBC's local management team that there were best practices that could benefit both organisations and that bringing the two companies together was a very logical next step.

"RBTT had a need that we were well-positioned to fill. This is a strong company that wanted a strong partner to help it realise its true potential," said the banker. "RBC's strength and history, combined with RBTT's Caribbean insight and expertise, are a formidable combination for customers and employees throughout the region."

RBTT shareholders, if they approve the deal will be paid in a combination of 60 per cent cash and 40 per cent RBC ordinary shares. Group chairman Peter July said the merger offers regional investors an opportunity to own part of an international company.

"RBTT shareholders will benefit by being able to crystallise the value of their investment and at the same time have the opportunity to own a portion of one of the best-performing financial services companies in the world," July told reporters. "This transaction significantly improves the liquidity of their investment."

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