Big business was in the news this week. Scotia Bank has found a buyer and they are moving on and out. Upon the completion of the transaction it will mean that Belize will have only three local banks namely, Heritage Bank, Belize Bank and Atlantic Bank. First Caribbean was bought out by Heritage Bank in August 2015. The license of Choice Bank was revoked in June 2018 followed closely by Atlantic International Bank in April 2019. Atlantic International Bank is embroiled in the largest international real estate scam in history. This current merger, between Scotia Bank and Belize Bank however, is being carefully scrutinized by the Central Bank of Belize. We may find little comfort in that fact, as it is quite possible that it was Central Bank’s extremely lax oversight which caused the problems at Choice Bank to go unnoticed and unchecked in the first instance. The Central Bank has given no indication whether the abrupt exit of Scotia Bank will have any negative effects on the banking industry. As readers may recall the International Monetary Fund had warned Belize that losing correspondent banking relationships are key risks to financial stability. Scotia Bank was the only bank in Belize to have remained unchallenged by the de-risking initiative used by the USA in order to combat money laundering.
While the PM likes to blame the Rona as the culprit to all our current economic woes, in reality it only accelerated our imminent downfall. He knows it, we know it and Scotia definitely knows it. Scotia had been the most profitable bank in Belize for years. Suddenly things took a turn for the worst and between 2016 and 2018 profits fell by more than 50%. Their business has never recovered and in fact continues a downward spiral. They have lost all confidence that our economy will recover and they want out and now! Scotia in fact was so desperate to make that sale that even though the last Quarterly Financial from the Central Bank reports their net worth at about 81.37M US they sold for just 30.5M US. The Lord got a huge fyah sale discount amounting roughly to 62.5%. When a banking giant like Scotia is willing to take that kind of a hit just so they can run it really is a vote of no confidence in the Belizean economy and its current leaders.
While the Governor of the Central Bank is so very cheerful about the sale the bigger question is what does it mean for the Belizean economy when the only bank to have survived de-risking without loss of correspondent banking relations leaves? What else has prompted Scotia to cut such significant losses in order to leave? The economy is in free fall; those that can are getting out as fast as they can, but for normal Belizeans this is not an option. There are those that have had their fill at the trough and now abandon this country in shambles and total ruin. Belize is our home, we must weather this storm and stay to pick up the pieces and rebuild a Belize that works for all of us!