Home' Trinidad and Tobago Guardian : February 13th 2014 Contents In the Caribbean, Royal Bank of Canada
(RBC) has been in the news recently for
its decision to sell its operations in
Jamaica to Sagicor Jamaica for US$84
million and for its retrenchment, relo-
cation and reorganisation of workers in T&T
for more than one year.
RBC has also been in the news because of
its separation of staff in T&T.
It has even been speculated that RBC is
about to sell its T&T branch operations to
HSBC, the huge British multinational banking
and financial services company headquartered
Who is RBC?
It is Canada s largest and most profitable
The bank s total assets in 2013 amounted to
C$860.81 billion, its net income in 2013 was
C$8.42 billion, which was earned from total
revenue of C$30.86 billion. Its 2013 net income
number represented a 31 per cent increase over
its profits of C$6.44 billion in 2011.
It is clear, though, that RBC s US$2.2 billion
acquisition of RBTT Financial Holdings in
2008, was in trouble almost from the start.
RBC paid shareholders of RBTT $40 a share,
with 60 per cent of the consideration in cash,
while the balance was in RBC ordinary shares.
The offer, which was made public in October
2007, represented an 18 per cent premium to
RBTT s closing price on September 28.
According to the information memorandum
issued to RBTT shareholders in preparation
for the March 26, 2008, meeting at the Hilton:
"The directors have determined that the amal-
gamation is fair to RBTT shareholders and in
the best interests of all RBTT stakeholders."
And the offer did turn out to be in the best
interest of shareholders. On June 16, 2008,
RBC put out a statement announcing that it
had acquired the RBTT Financial Group with
its presence in 18 countries and territories
across the region, with a presence in 18 coun-
tries and territories across the region, with
7,000 employees serving more than 1.6 million
clients in 130 branches with more than US$13.7
billion in assets.
Unfortunately for RBC, less than three
months after the transaction was wrapped up,
the US government was forced to bail out
Fannie Mae and Freddie Mac and the US bank
Lehman Brothers filed for bankruptcy, prompt-
ing worldwide financial panic.
In T&T, the collapse of Lehman Brothers
was followed in short order by the collapse of
the global prices of T&T s exports of oil, natural
gas, methanol and ammonia and by the
announcement by former prime minister
Patrick Manning that it was belt-tightening
Seven months after the RBC acquisition,
Clico and CL Financial collapsed and both the
local and global realities impaired the balance
sheets of all local banks as a result of a severe
reduction in the appetite of T&T nationals for
loans---which are the lifeblood of all banks.
In a sense, then, the Canadian acquisition
of the T&T bank was in distress from the start,
while the T&T shareholders of the RBTT Finan-
cial Group were smiling all the way to the bank.
From anecdotal evidence the bank they went
smiling to may not have been RBC, as it seems
to me that RBC s Canadian owners have gone
out of their way to alienate their Caribbean
Is it unfair to say that RBC s attempt to
impose a Canadian banking model in the region
has been naive, ill-advised and rife with cultural
blindness and deafness?
The Canadian banking model, as far as I
can determine, is to encourage its customers
not to visit their branches but to use telephone
banking, mobile banking and ATMs.
I got this insight from David Dulal-Whiteway,
the chief executive of Republic Bank, who made
the point in the December 6, 2012, edition of
this publication that regional banks have more
staff for their assets than banks in the US or
"Much of that is because of the way our
customers interface with us. The last time I
went to Canada, I said you can turn all the
banks into bowling alleys because there are so
few people in the banking halls.
"But if you go into a bank branch in Trinidad,
it is full of people, even though we have tele-
phone banking, Internet banking and ABMs.
We are going to introduce our mobile banking
soon---some of our competitors already have
"Despite all of the technology, we have many
people coming into our branches. The reason
we have large branches is because we have
many walk-in customers. It s a matter of getting
our customers to shift so that customers no
longer come into the branch to pay their cred-
it-card bill or their telephone bill."
The point is that Mr Dulal-Whiteway accepts
the cultural reality that Caribbean people in
general, and T&T citizens in particular, prefer
to do their banking face-to-face with their
While Republic is also looking to cut costs,
it realises that reducing staff too much and
too quickly is like cutting off their nose to spite
RBC, it seems to me, is adamant that this
way of doing business is inefficient and costly.
RBC is attempting to reduce the cost of its
operations by separating staff, closing down
some VIP centres, centralising operations and
introducing fees for walk-in customers.
In order to drive efficiency, RBC has cen-
tralised much of its deposits and its call centre
at a central branch.
This means that if someone wants to get a
loan or buy some vacation foreign currency
from RBC, you call a local 623 number, which
is answered by a bank employee in Chaguanas,
who informs you that opening an account,
getting a loan or buying US dollars is now done
In an e-mail exchange at the end of last
month, the regional communications manager
at RBC Caribbean Banking Nicole Duke-West-
field said the bank was "aggressively managing
our Caribbean business to improve and
strengthen our business performance."
According to Duke-Westfield: "Across the
Caribbean, RBC is focused on improving and
strengthening our business performance, service
and competitiveness on a sustainable basis.
"We, like other business and individuals, are
navigating through challenging economic times
in many countries across the region."
RBC Caribbean also said that it was looking
to "effectively managing our cost base" in T&T,
a clear reference to staff separation.
In Barbados, in the meantime, the bank said
that it needed "to look for areas to improve
efficiency including consolidating branches,
while working with clients who are also impact-
ed by the economic environment."
RBC, through Ms Duke-Westfield (who is a
friend and former colleague) said the bank was
trying to "effectively managing our cost base"
She said: "As part of our efforts to improve
and strengthen our business performance and
competitiveness, we have had to make some
difficult decisions with regard to our employee
"This means some degree of job impact in
our markets and RBC has been working to
manage this impact and achieve efficiencies
through varying means---eg attrition, early
retirement. Where we are separating with
employees we ensure that we comply with,
and in some instances exceed what the law
"The separation of staff is never easy and
RBC will continue every day to treat its employ-
ees with dignity and respect throughout the
"As a responsible company and employer,
we respect for the rights of our employees,
and as policy, we will not discuss numbers
Documents filed with SEC
In the January 9 (Week 2) edition of the
Business Guardian, a commentary headlined
Why are NEL, N&M hiding material facts?
was written in this space.
That commentary was based on our under-
standing of the requirements of Section 64 of
the Securities Act 2012, which deals with the
disclosure of material information.
Following a complaint by Neal & Massy, the
Business Guardian communicated with the
Securities and Exchange Commission (TTSEC).
We are satisfied in the circumstances of the
acquisition agreements signed by NEL and
Neal & Massy that both companies filed mate-
rial change disclosure forms with the TTSEC.
In addition, Neal & Massy has taken excep-
tion to our reference to the possible use of
privileged information held by directors and
senior officers of the company opening the
door to insider trading.
It was not our intention to impute or imply
wrongdoing on the part of the directors or
senior officers of Neal & Massy and any such
implication is regretted.
FEBRUARY 2014 • WEEK TWO www.guardian.co.tt BUSINESS GUARDIAN
COMMENTARY | BG3
Chief editor-business: ANTHONY WILSON
Editing and design: NATASHA SAIDWAN
Fax: (868) 623-2050 (Editorial)
Fax: (868) 623-2050 (Advertising)
22-24 St Vincent Street,
PO Box 122.
Is RBC Caribbean trying to succeed?
Communications manager RBC Caribbean
David Dulal-Whiteway, CEO of Republic Bank Suresh Sookoo, CEO of RBC Caribbean
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