Scotiabank’s bombshell decision to sell operations in ‘non-core’ Caribbean countries, announced in November last year, put one of its prized facilities – a 750-person shared services center in Trinidad, into a state of limbo.
Scotibank operations in nine countries in the region are targeted to be purchased by Republic Financial Holdings Ltd, in a transfer that the new owners promise will not lead to job losses. Operations in Guyana, St. Maarten, Anguilla, Antigua and Barbuda, Dominica, Grenada, St. Kitts and Nevis St. Lucia and St. Vincent and the Grenadines are all part of the pending deal. The bank has stressed that the move is not so much an ‘exit’ from the Caribbean, but driven around ‘re-focusing’ on the main emerging markets of the region, and improving services and delivery in those locations. Nonetheless, the news of the sale has been a sore spot in some countries, particularly in Antigua where the Prime Minister is threatening to retaliate by nationalizing the bank’s assets in an effort to protect the ‘public trust’. It is expected to take another four to six months to complete the deal, pending regulatory approvals in each of the affected countries.
When the bank issued a press release announcing the sale, there was no mention of what would become of the bank’s Trinidad shared services center, which opened to much fanfare in 2013. Nearshore Americas subsequently contacted the media team at Scotiabank for clarity around whether the center, also called ‘the hub’, would be affected in some form. In response, Scotiabank’s Stephen Bagnarol, SVP and Country Head Trinidad and Tobago communicated the following:
“With respect to the Hub, the nine countries represent only 16% of the volume of clients served in the region. As we look to grow in the markets where we have size and scale, volumes would be expected to grow accordingly. When the deal closes with Republic Financial, the Hub will continue providing shared services for 18 months.”
Bagnarol and the bank had no further comment. One naturally would assume, based on these remarks, that the hub’s future becomes uncertain once the 18-month mark is reached, presumably in 2020. One is left to wonder if the hub, after 18 months, still remains a key support mechanism for the remaining 84% of market activity in ‘core’ markets, like Jamaica, Trinidad and Barbados? For now, the bank isn’t making clear what those plans are. The bank currently employs over 4,000 employees across the Caribbean. Scotiabank selected Trinidad for the hub, because of its infrastructure and telecommunications, and also the quality of the local workforce.
“The capabilities of the candidates we hire are at a high level. Trinidad & Tobago has invested significant public resources into providing their population access to higher level education through various government sponsored programs and this has significantly expanded the population’s access to tertiary level education,” said Anya Schnoor, the bank’s Trinidad director, in an interview with Nearshore Americas in 2013.
“The shared services hub facilitates our front-line employees’ focus on providing advice and solutions to customers as the back-office functions are carried out separately, here. Furthermore, the hub allows us to provide best in class service and continue in our thrust of continuous improvement in the service delivery platform to all our customers at the lowest cost,” Bagnarol was quoted as saying in a Trinidad and Tobago Newsday article last year.
The bank spent a reported $15 million USD in 2013 to prepare the 68,000 square foot operation, housed at the Trinidad and Tobago International Finance Center in Chaguanas. The center’s employ base has nearly doubled from 400 to over 750 in the last five years. The bank opened its first overseas branch in Kingston, Jamaica in 1889, and has been the largest commercial bank in the Caribbean throughout its existence.