BRIDGETOWN, Barbados, CMC:
THE ACQUISITION of the Mutual Bank, Barba-dos' lone indigenous commercial bank by the Bermuda-based N.T. Butterfield and Son Limited, is in keeping with the current trend of globalisation and trade liberalisation, a local financial analyst has said.
Certified financial analyst, Anthony Johnson, who is formerly of the Barbados Central Bank, believes that more such take-overs will occur in the region in the future.
The sale of the Mutual by SAGICOR Financial was completed last Thursday and comes after more than three months of rumours. It is estimated to have earned the owners close to US$7.5 million.
Johnson, who now works with the University of the West Indies, commented that it is a 'good thing' for Barbados, noting that the take-over was part of the market enlargement taking place in the region and fits in with the stated goals of the proposed Caribbean Community Single Market and Economy (CSME).
The financial analyst said while some persons may object to the sale from a nationalistic point of view, from an economic standpoint, the return on capital has to be in the best interests of the shareholders.
"It demonstrates the propensity for greater movement and economic activity towards the reality of the integrated regional market. Economic resources should move to any area where they will yield the highest rate of return and is in the best interest of the shareholders," he stated.
Butterfield's executive vice-president International & Trust, Graham Brooks, is on record as saying that the acquisition of the Mutual Bank could very well benefit the local business community, particularly in the small and medium-sized business sector.
"We have a lot more capital than the Mutual Bank has, so we would be able to look at larger facilities than they did. We are here to work with the community. It is in our commercial interest to work with the business sector to work with our customers and to meet their needs," he said.
The Bermuda based bank has a market capitalisation totalling US$905 million and shareholder equity of US$ 777 million.
Brooks said the Mutual, which is the Bank of Butterfield's third acquisition in four months, was a good fit in Butterfield's portfolio.
The Bank, which is Bermuda's oldest bank formed in 1758 and has been awarded Bank of the Year awards by the <B>Banker<P> magazine in 2002 and 2003, also has assets in Bermuda and Cayman Islands.
"We are very focused as a community bank. We are also very big as a wealth management and fiduciary services bank with some US$7 billion of assets under management and US$50 billion of assets under administration," said Brooks.
