Scotiabank: Is might, right?
The Canadian-owned Bank of Nova Scotia, or Scotiabank, has more than US$1 trillion in assets; the GDP of the small island state, Antigua and Barbuda, is just US$1.5 billion.
Yet, there is what the Canadian newspaper, Globe and Mail, described, on August 26, as a “stand-off” between Scotiabank and the Government of Antigua and Barbuda over Scotiabank’s desire to sell its holdings in Antigua without involving the government in the sale to Republic Financial Holdings (RFH), headquartered in Trinidad and Tobago.
Scotiabank’s decision not to discuss the sale of its holdings in nine Caribbean jurisdictions with the governments concerned, in advance of concluding an agreement, was extraordinary, particularly as, in Canada, no bank or bank branch can carry on business without obtaining the approval of the finance minister and the Office of the Superintendent of Financial Institutions. The Bank appears to believe that it could contravene in the Caribbean what it would be obliged to obey in Canada.
Apart from ignoring the law in Antigua and Barbuda, Scotiabank’s decision demonstrated a lack of good corporate judgment. It could not have been difficult to engage governments about plans to sell before concluding a sale agreement with RFH. Unless it assumed its clout would hammer acceptance of the sale.
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