Friday, August 29, 2008

Scotia DBG retreats from Trinidad

Published: Friday August 29, 2008

Jamaica's Scotiabank DBG Investments Limited is selling its Trinidad operation to affiliated company Scotiatrust and Merchant Bank Trinidad and Tobago Limited, a disclosure made in Port-of-Spain this week.

Scotiabank Trinidad, parent to Scotiatrust, in its six-months earnings report released Wednesday, told shareholders that negotiations, while ongoing, "would soon come to fruition."

Scotia DBG's Chief Executive Officer, Anya Schnoor, told the Financial Gleaner that the Trinidad subsidiary's assets were now being valued.

The disposal, she said, would allow the company to refocus on its Jamaican market, where the company trails big rival NCB Capital Markets Limited.

But it also offers Scotia Group Jamaica, parent to Scotia DBG Investments, the opportunity to pull back from its sister company's operating space, on which it would have encroached by happenstance when it acquired the Dehring Bunting and Golding Limited financial group in late 2006.

"We are focusing on our core operations in Jamaica, but will maintain a partnership with our sister operations in Trinidad where they will continue to sell our unit trust/mutual fund products in the future," said Schnoor.

"As a part of the Scotia Group, we have access to the worldwide Scotia operations and therefore the need to set up separate SDBG offices in various countries is not needed," she added.

PRICE unclear

Scotia DBG Trinidad, run by country manager Lisa-Maria Alexander, is currently trading on on the Port-of-Spain exchange at TT$2.52 per share, but it is unclear at this time how the deal is being priced - whether as a cash or combination shares transaction.

Schnoor said that the deal will be to sell to Scotiatrust the assets and liabilities of the branch in Trinidad.

"We are still in the negotiating stage of this transaction and no sale price has been determined," she said.

"We will be engaging the services of an external valuator to guide us in that matter."

Scotiabank Trinidad has indicated that the deal is close to being sealed, saying negotiations were advanced and "would soon come to fruition."

"This acquisition would bring to the group a company which is licensed as a securities company, entitled to provide investment advice and act as a securities dealer and underwriter," the banking group said.

Scotia DBG Trinidad became operational in November 2005 as Dehring Bunting & Golding Trinidad Limited, a year before Scotiabank Jamaica's acquisition of the brokerage.

Its offerings in the Trinidad market includes mutual funds and multi-currency repurchase agreements.

Partnerships possible

Schnoor said that future expansion to other markets has not been ruled out.

"Where we can partner with various countries we will do so."

The sale will now contain Scotia DBG operations to two principal geographical areas - Jamaica where its main assets are deployed, and the Cayman Islands.

In its nine-month results to July 2008, Scotia DBG recorded sales of $5.5 billion - up by more than $2 billion year-on-year, from which it reported net profit of $936 million or $2.21 per share.

The company is capitalised at $38 billion and is valued on its balance sheet at $64 billion by total assets.

Schnoor says the Trinidad branch is small and represents less than one per cent of the company's revenue.

Sabrina Gordon
Jamaica Gleaner

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