(CMR) Regulators have rejected CIBC's plans to sell a majority stake in CIBC FirstCaribbean to GNB Financial Group Limited for $797 million.
CIBC sought to scale back its presence in the Caribbean and announced the sale of the two-thirds stake in CIBC FirstCaribbean in November 2019.
The deal, which would have left CIBC with a 25% stake in the Barbados-based bank, valued FirstCaribbean at about $1.2 billion, less than half of its $2.8 billion value when CIBC took over most of the business, Bloomberg reported.
Harry Culham, Group Head, Capital Markets, who also oversees FirstCaribbean, said the transaction would have created value for stakeholders.
“While this transaction would have supported FirstCaribbean's long-term growth prospects, it is only one way of creating value for stakeholders,” Culham said.
He said the bank was committed to executing strategies in the best interest of all.
“FirstCaribbean is focused on building deep, long-lasting client relationships in the Caribbean, optimizing our business, and enhancing efficiency over time. We remain committed to executing on our long-term strategy and delivering the best outcome for clients, shareholders, team members, and communities,” Culman added.
CIBC did not give the reasons for the rejection of the proposed sale to the company run by Colombian billionaire Jaime Gilinski.
CIBC is a leading Canadian-based global financial institution with 10 million personal banking, business, public sector, and institutional clients. It has been offering banking services in the Caribbean since 1920.
According to Bloomberg, the financial institution combined its operations in the region with Barclays in 2002 to create FirstCaribbean. Four years later, CIBC purchased the British bank’s 44% stake in the operation for $988.7 million.
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