March 13 was a red-letter day for Cayman National Corporation Ltd.
That was the day the Trinidad-headquartered Republic Group finalised its acquisition of Cayman National, making the territory’s only local bank local no longer.
Pursuant to the terms of the acquisition, Cayman National shareholders voted at the bank’s March 27 annual general meeting to appoint Republic Group executives Nigel Baptiste and Roopnarine Oumade Singh to the board of directors.
Baptiste was at the general meeting, and spoke to reporters about the Republic Group’s plans for Cayman National.
According to Baptiste, Cayman National will more or less be left to run on autopilot, at least in the foreseeable future. He said the reason the Republic Group wanted to buy Cayman National is because of its quality financials. Cayman National had earned a record $22 million in net income last year, and is on pace to set another record this year with $6.2 million in net income through its first quarter, an 18-percent increase over Q1 of last year.
“The Cayman National brand is strong, and critical to that brand identity are its management and employees. Indeed, it is an integral component we very much wish to maintain,” said Baptiste.
Republic’s commitment to maintaining the current composition of Cayman National goes beyond lip service, and is included in the agreement terms of the nearly US$200 million acquisition.
For instance, Republic has committed to not institute systematic layoffs or redundancy for at least five years, “unless there is a significant adverse economic change or compelling business reason to do so”, the Trinidad group’s offer circular states.
The circular further states that the Republic Group does not intend to introduce any major changes to the business or operations of Cayman National, to discontinue the employment of the employees of Cayman National, or to re-deploy the fixed assets of Cayman National, except in the ordinary course of the business – “provided, that [Republic] retains the flexibility at any time to consider any options in relation to Cayman National which the [Republic] may regard to be in the interest of Cayman National as part of a wider corporate group.”
As for the name and branding of Cayman National, Republic Group has committed to maintaining those things until at least Dec. 31, 2023, according to the circular.
Nevertheless, Cayman National did undergo a major change in leadership during the acquisition when Cayman National Bank President Ormond Williams was terminated after serving in his position for 15 years.
Cayman National CEO Stuart Dack stressed that Williams’ removal had nothing to do with the acquisition.
“Let me make that very clear: that was a determination of the Cayman National board,” Dack said at the March 27 meeting. “That was not a request or a condition of our relationship with Republic.”
Dack added that he is limited in what he can say about the termination of Williams, as the former president filed a lawsuit against Cayman National in early March.
Most potential changes should be positive for Cayman National employees, said Baptiste.
The Republic Group has an online training academy for its 5,000-plus employees, he said. This training, as well as potential opportunities to work in other jurisdictions, are now open to Caymanians.
“The people won’t necessarily change, but what will change is the tools and skills we share with them,” said the new Cayman National director.
Baptiste said Republic Bank’s acquisition may pose other opportunities for marginal improvements at Cayman National. For instance, both institutions share the same banking and credit card platforms, so Republic Bank’s expertise with such platforms may translate into improvements for Cayman National.
Baptiste was asked by a reporter about how Cayman National will keep its staff while staying competitive in a market that’s increasingly moving towards automation and away from human labour.
“That’s Stuart’s [Dack] job,” Baptiste replied jokingly. Dack said Cayman National’s goal is to keep its staffing levels as they are – roughly 300 employees, 98 percent of them Caymanian – while adding to the bank’s book of business.
“Tech frees up people, but the question is whether you free people up to go home, or free them up to go get more business,” Baptiste added. “People’s jobs may change, their toolsets might change, but the stability of their job is not in question.”
These sentiments have been communicated to the Cayman National staff, said Dack, and their morale has been steadily improving since the potential sale was announced last August.
“I think people have settled down, their minds have been reassured,” he said. “The transaction last week was complete, and everyone is still working, everyone is still happy.”
Baptiste said scepticism amongst Cayman National employees would not surprise him since “words are cheap,” but that he hopes Republic Group’s actions in the coming months will show them that their new owner is a quality employer.
“I think that over time, people will see what we are doing,” he said.
Meanwhile, the Republic Group is in the midst of finalising another transaction, with its purchases of Scotiabank operations in nine Caribbean countries.
Baptiste said these acquisitions are part of Republic Group’s larger expansion strategy, but are not linked together. Republic Group started buying Cayman National shares before it initiated any Scotiabank acquisitions.
Baptiste said one of the main reasons Republic Group was interested in the Scotiabank branches was because they operated in seven Caribbean jurisdictions where Republic Bank did not have a presence. In addition to the sale of banking operations in Anguilla, Dominica, Grenada, Guyana, St. Kitts & Nevis, St. Lucia, St. Maarten and St. Vincent and the Grenadines, Scotiabank is selling its insurance subsidiaries Scotia Jamaica Life Insurance Company and ScotiaLife Trinidad and Tobago Limited to Sagicor.
“We now more or less have a presence in the entire Caribbean,” said Baptiste.