TORONTO (Reuters) - Royal Bank of Canada (RY.TO) said on Wednesday that it had agreed to sell its Jamaican banking operations to Sagicor Group Jamaica Ltd SJ.JS.
The bank, Canada’s largest, said the purchase price was roughly the book value of the assets, but did not elaborate. It expects to lose C$60 million ($54 million) from the transaction, partly because of a goodwill writedown.
Sagicor Group Jamaica is controlled by Barbados-based financial services company Sagicor Financial Corp (SAFI.L), according to Thomson Reuters data.
Royal Bank said it remained committed to the Caribbean but would focus on regions there where it has a bigger market share.
The Jamaican market is dominated by Royal Bank’s smaller Canadian rival, Bank of Nova Scotia (BNS.TO). Scotiabank, which has been operating in the country since the late 1800s, has more than 2,000 staff there and an island-wide network of about 35 branches.
“The sale of Royal Bank’s Jamaica operations will likely raise questions regarding the strategic implications for other regions in the Caribbean that it operates,” Barclays analyst John Aiken said in a note to clients.
Aiken raised the possibility that Royal Bank would exit the entire region if its operations there would fetch a high enough price.
Shares of Royal Bank were down 46 Canadian cents at C$69.10 in early trading on the Toronto Stock Exchange on Wednesday.
Reporting by Allison Martell and Euan Rocha; Editing by Lisa Von Ahn