Canadian banks eye Cuban presence as tensions ease
By Cameron French
TORONTO (Reuters) - Bank of Nova Scotia (BNS.TO: Quote) has applied to re-establish a presence in Cuba and a report says rival Royal Bank of Canada (RY.TO: Quote) is considering a similar move in the wake of Cuban reforms and a thawing of the country's icy relationship with the United States.
Both banks were players in the country before the 1959 revolution in which Fidel Castro took power. The revolution ushered in an era of communism and U.S. sanctions that has made it difficult for companies with a U.S. presence to do business there.
But U.S. relations with Cuba have thawed somewhat under U.S. President Barack Obama and after the aging Fidel Castro handed over power to his liberalizing younger brother Raul, encouraging the banks to take initial - if tentative - steps back into the country.
"I think a lot of people are looking at the regime changes and the age of Castro and his brother and thinking it's only a matter of time before Cuba basically opens up," said Lawrence Booth, a finance professor at the University of Toronto's Rotman School of Management.
Scotiabank, Canada's No. 3 lender, said it has applied to the Central Bank of Cuba for a representative office license.
"A representative office will allow Scotiabank to reacquaint ourselves with the Cuban market, which will provide a strategic window into the marketplace and enable us to acquire in-depth local knowledge and build relationships," the bank said in a statement.
The office would aim to expand the bank's trade-finance business with Cuba, but would not conduct any local transactions or direct banking services, Scotiabank said.
RBC, Canada's biggest bank, is also considering a move back into the country, the Financial Times reported. Continued...