Competition Commission flags ‘anti-competitive’ effects of intended sale of Scotiabank assets

The intended sale of ScotiaBank’s assets in nine Caribbean countries could have anti-competitive effects in at least three Member States, the CARICOM Competition Commission said.

ScotiaBank last November announced its intention to sell banking assets in nine English- and Dutch-speaking countries in the Caribbean: Anguilla, Antigua and Barbuda, Dominica, Grenada, Guyana, St. Kitts and Nevis, Saint Lucia, St. Maarten, St. Vincent and the Grenadines, to Republic Financial Holdings Ltd (“Republic Financial”) and life insurance operations in another two countries (Jamaica and Trinidad and Tobago) to Sagicor Financial Corporation.

“Such assessment indicates that the proposed transaction or parts thereof could possibly have anti-competitive effects in at least three (3) Member States in the Community”, the statement said.  It did not name the three countries.

The CCC said that it will approach the competition authorities and sector regulators in the affected Member States in accordance with Article 176(1), for the conduct of preliminary examinations of proposed transaction between the enterprises. Article 176 1 states “Where the Commission has reason to believe that business conduct by an enterprise in the CSME prejudices trade and prevents, restricts, or distorts competition within the CSME and has cross-border effects, the Commission shall request the national competition authority to undertake a preliminary examination of the business conduct of the enterprise.

After the announcement of the intended sale to Republic Bank, the Competition Commission, based in Suriname, had signalled its intention to assess the possible impact on the Community market.

Please see statement issued by the CARICOM Competition Commission:

“On 5th December 2018, the Commission advised the public that it took note of an announcement on 28th November 2018 by the Bank of Nova Scotia (“Scotiabank”) of an intended sale of banking assets in nine (9) territories in the Caribbean to Republic Financial Holdings Ltd (“Republic Financial”) and life insurance operations in another two (2) territories (Jamaica and Trinidad and Tobago) to Sagicor Financial Corporation (“proposed transaction”).

In accordance with Article 173(2)(a) of the RTC, the Commission further advised that it would continue to monitor these developments in the banking and insurance sectors and that any impact to the CARICOM Community by the proposed transaction would be assessed in accordance with the provisions of the RTC.

The Commission informs that it has now completed a preliminary assessment pursuant to Article 173(2)(a) of the RTC. Such assessment indicates that the proposed transaction or parts thereof could possibly have  anticompetitive effects in at least three (3) Member States in the Community.

The Commission remains cognizant of the provisions of Article 175 of the RTC, and at this time reminds national competition authorities and Member States of this critical provision. The Commission also informs that it shall approach those national competition authorities and sector regulators in affected Member States in accordance with Article 176(1), for the conduct of preliminary examinations of proposed transaction between the enterprises.

In furtherance of its commitment to fair and transparent processes for both the business community and consumers, the Commission will continue to monitor this activity in the Community and will inform as appropriate on further progress of this matter in affected Member States.”