Merchant banking sector down to two players
Published:Friday | October 8, 2010 | 12:00 AM
The transfer of assets and liabilities of Scotia DBG Merchant Bank Limited to Bank of Nova Scotia Jamaica was finalised October 1, erasing from the group structure an operation that Scotiabank considered a duplication of the commercial-banking arm.
Scotia Group Jamaica in a J$879-million cash deal with its subsidiary Scotia DBG, acquired the merchant banking operation in May 2010, which it then merged with BNSJ.
The merger adds J$3.5 billion of assets - J$1.8 billion of which are loans - to BNSJ's J$190-billion base.
It also narrows the merchant banking market to two players - CCMB and MF&G Finance and Trust Limited - which control J$25 billion of assets.
"Both Scotiabank and Scotia DBG Merchant Bank Limited offered similar products and services and it was, therefore, a natural progression to consolidate both entities to gain efficiencies while offering customers greater convenience, based on Scotiabank's wider distribution network and product offering," said Wayne Powell, executive vice-president in charge of branch banking at Scotiabank.
Scotia Group said all loans, other assets and deposits and other liabilities of Scotia DBG Merchant Bank Limited "were transferred to and became vested in Scotiabank".
"This reorganisation is aimed at offering customers added convenience while improving efficiencies across Scotiabank Group. The transaction was undertaken by way of a scheme of transfer under the Financial Institutions Act, which was approved as provided for under the statute," the bank said.
The merchant bank operated from leased office space on Holborn Road in New Kingston.
Its customers will be advised in the coming weeks of the Scotiabank branch to which their accounts have been transferred.
"We have gone to tremendous effort to ensure that our new Scotiabank customers experience minimal displacement, this includes positioning customers at the most convenient Scotiabank branch," said Powell.