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RBC has confidence in Caribbean

‘A strong sign of confidence in the region’: that’s how Richard Rajack, managing director of business banking for the RBTT NV in Curaçao, describes the return of the Royal Bank of Canada to the Caribbean. On June 16 the Royal Bank of Canada fi nalized the US$2.2 billion takeover of RBTT Financial Holdings Limited, headquartered in Trinidad & Tobago. The deal creates a banking giant with 130 branches in 18 countries and territories in the Caribbean, in addition to RBC’s offi ces in more than 40 countries around the world.

At the signing of the deal, Peter July, chairman of RBTT Group, said that the combination of the two banks was all about growth and expansion. ‘It has brought enhanced value to our shareholders who, in addition to receiving a premium for their RBTT shares, can now invest in one of the most stable and successful banking entities in the world’, July said. At the same occasion, Jim Westlake, RBC’s head of International Banking and Insurance said: ‘The completion of this transaction affirms RBC’s position in the Caribbean region and advances our strategy to continue to grow our banking operations outside
Canada. RBTT’s network complements our Caribbean retail banking operations perfectly.’

Since June 16, RBC and RBTT have been busy merging the two companies. For the time being there won’t be any obvious changes, such as new logos, branding or a new management, says Rajack. ‘RBC has expressed their satisfaction with the current management.

The integration is more about cultures, operating processes and policies, for example in risk management: standardization of credit policies and guidelines to refl ect one common procedure.’
The integration of the two cultures, from origin Canadian and Caribbean, is going smoothly. This is no surprise since RBTT used to be a subsidiary of the Royal Bank of Canada, a relationship that dates back to 1902. In 1972 the Royal Bank of Trinidad and Tobago took over the governance of RBC in Trinidad
and by 1985, 100 percent of the shares was in local hands.

‘So for RBC this is familiar territory. There was a relationship with RBTT before and they still had offi ces in the region; the Bahamas, Barbados, the eastern Caribbean. The banks in fact are not so far apart. I think the integration will go very smoothly and constructively’’, Rajack says.

‘But it will also take some time, maybe a year to a year and a half, and it has to be done in a careful way. We have to focus on our people, make sure they are comfortable with and that they understand
the changes’’, Rajack says. ‘Our Group CEO communicates via internal mail every week which is received by all personnel. Recently he has been focusing on the acquisition, how the process is going so that staff are continuously updated on how things are progressing.

And on a local management level, we also periodically inform staff face to face what changes are taking place. So the whole integration process is being carefully planned and equally carefully executed with the people in mind.’’

The acquisition also has a lot of benefi ts for the employees. Rajack says. ‘For the employees there will be training opportunities, because RBC is a very large bank with a lot of training programs. In addition, there may now be possibilities for people who have the desire to work in a different territory, in another part of the Caribbean to apply for jobs that may be advertised within the Group.’’

Clients of RBTT will certainly benefit from the deal, which makes RBTT part of a much larger group but it will remain a bank with a personal approach of every individual who visits the bank. ‘The acquisition gives us certain strength as a group, certain recognition. But the personalized customer service will not
change. If anything, it will become better because we would have more to offer.

We will improve the customer experience. That is on top of our priority list.’ Rajack was not ready to give any details about new products or services in the making, but confi rms RBTT is doing its continuous research about what would have relevance for the Dutch Caribbean market. ‘When the time is right, we will introduce new and relevant products.’

Apart from that, doing business with a bank that is present on many islands and in many countries makes it easier to do business with those islands and countries. The biggest benefi t however, is not
about size. It is the sign of confidence in the region that might attract other investors, Rajack stresses.
‘The fact that a bank with the stature of RBC has decided to expand their position in the Caribbean for 2.2 billion dollars, a substantial amount by any means, is a sign of confidence in the Caribbean economies, the Caribbean as an area for doing business. The Caribbean is an attractive, prospering
place. It has a generally stable environment.

The economy of many of the islands in the Caribbean is doing quite well and the outlook is very positive. In Curaçao, we see investments in other areas as well: the Hyatt Hotel and the Renaissance Hotel. This indicates confidence in the economy of Curaçao. RBC shares this view, also for the wider Caribbean.
The greater point that should be acknowledged is that this deal demonstrates confi dence in the Caribbean as a whole. If other people observe that, they will certainly think about it and it will possibly inspire them to take a step in that direction.