Scotiabank to close 35 branches in Caribbean

PHILIPSBURG--Country Manager of Scotiabank St. Maarten Raymond Green said Thursday that there was no indication on the local impact of Canada’s Scotiabank’s recent announcement that it would close 35 of its more than 200 branches in the Caribbean and that it would sever 1,500 full-time employees, including 500 in its international operations.
In an invited comment Green said the numbers announced relating to branch closures are across Scotiabank’s international network. He said the bank is still undergoing its review and “this will take some time, therefore, we do not have detailed information as yet on local impacts. As we move forward over the coming months, we will continue to provide our employees and customers with more information.”
Green said the review of the bank closures is expected to be completed “over the next two years.”
Scotiabank has two branches in St. Maarten; its main branch in St. Maarten is in Philipsburg, while a second branch is in Simpson Bay.
The Trinidad and Tobago Guardian reported on Thursday that Scotiabank said in a news release that it was expected to record certain charges in its fiscal 2014 fourth quarter earnings, aggregating to a total of approximately $451 million pre-tax.
Of the Caribbean, Scotiabank said: “Due to the prolonged economic recovery and continued uncertain outlook, these additional amounts bring the net carrying value in line with the expected net recoverable value.”
The bank said it had started restructuring initiatives “in order to improve the speed and quality of service it provides its customers, to reduce cost in a sustainable manner and to achieve greater operational efficiencies, the Guardian reported.
“The bank intends to record a restructuring provision of approximately $148 million in the fourth quarter. The majority of the restructuring provision relates to employee severance charges in the bank’s Canadian banking and international banking divisions and will affect people at all levels of the organisation.”
According to the Guardian the statement said, “In international banking, the charges are primarily for closing or downsizing approximately 120 branches, which will allow us to focus on high-growth markets, minimise branch overlap, and realise synergies resulting from recent acquisitions.”
In a conference call, Scotiabank President and Chief Executive Officer Brian Porter said, that of 120 branches to be closed across the bank’s network, 35 would be shuttered in Mexico and “about 35” in the Caribbean.
In response to a question from a Canadian banking analyst during the conference call, Porter said: “In some of these (Caribbean) countries, we are just over branched and we have to size it to the economic realities of these economies.” Scotiabank operates in 21 countries in the region.
The bank also wrote down the value of its unremitted dividends from a 27 per cent stake of a bank in Venezuela as it “adopted a revised exchange rate.” Scotiabank said it would announce its year-end and fourth-quarter results for fiscal 2014 on December 5.

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