Royal Bank of Canada is reportedly set to acquire British American Bank in the latest round of acquisitions and mergers evident in the local financial services sector.
While executives of both institutions remain tight-lipped as they work to close the deal, sources close to the buyout are beginning to reveal information regarding the acquisition.
“British American has been going down hill for several years now,” said one bank executive, who spoke to the Bahama Journal on condition of anonymity.
Another source told the Bahama Journal Thursday that British American executives had approached at least two other commercial banks offering the bank for sale because the institution has been facing financial difficulties for quite some time.
“They were trying to get other banks to buy it,” he said. “But what they were asking for was just too much. The problem is when you buy something like that, you buy other people’s problems.”
The source said British American “wasn’t going anywhere. The bank wasn’t growing.”
According to a recent financial statement from the bank, net income for the quarter ended September 30, 2002 amounted to $228,689 compared to the same period last year of $386,321 representing a decline of $157,632.
Net income for the third quarter, when compared to the second quarter of the year was down $120, 957.
“The decline in net income compared to [the] third quarter [of 2001] was due to a reduction in our spread,” according to the statement.
For some time, there was reportedly no board meeting of the bank, he said. Anxious employees of British American Bank, who had been aware of speculations about the buyout, were increasingly worried about their job security as they kept their eyes and ears peeled to the situation still unfolding at FirstCaribbean International Bank, the entity that was formed after the merger of CIBC and Barclays last year.
One employee of British American Bank told the Bahama Journal that, “All we are hearing is that they want to sell. But they are short on giving us information.”
The bank was incorporated in the Bahamas on May 26, 1978.
It was founded by British American Insurance Company Limited, a multinational financial services corporation established in the country in 1920.
Fidelity Bank & Trust International Limited purchased the bank from British American Insurance Company Limited.
In 1995, Fidelity offered for sale 5,339,883 of its shares to the Bahamian public, which was fully subscribed.
British American Chairman Anwer Sunderji and Royal Bank executive Ross McDonald never returned Journal calls made several times over the last few weeks regarding reports of the buyout.
There was also no call back from Peter Thompson, British Americanﾴs president and chief executive officer.
The merger of CIBC and Barclays, meanwhile, continued to make headlines this week as FirstCaribbean officials informed the workers that there would be redundancies.
The workers went as far as staging a demonstration in front of the House of Assembly Wednesday and they warned that what was planned for FirstCaribbean had huge implications on other employees in the financial services industry.
The Bahama Journal
