December 18, 2011 10:19 pm
By Bernard Simon in Toronto
Two of Canada's big banks are considering returning to Cuba after an
absence of more than half a century in the wake of reforms that portend
new opportunities for private enterprise and foreign investors.
Bank of Nova Scotia has applied to the Cuban authorities to set up a
representative office in Havana while Royal Bank of Canada is examining
Scotiabank said that the new office would allow it "to reacquaint
ourselves with the Cuban market, which will provide a strategic window
into the market place and enable us to acquire in-depth local knowledge
and build relationships".
Jim Westlake, head of RBC's international operations, said: "We're in
the very early stages of looking at it."
Mr Westlake met the Cuban ambassador to Canada this month with a view,
he said, of "trying to gauge how they are feeling about business
generally coming to Cuba".
But in planning a return to the island, he added, RBC was concerned
about not running foul of US sanctions.
Both RBC and Scotiabank operated in Cuba before the 1959 revolution and
still maintain an extensive presence across other parts of the Caribbean.
Mr Westlake said that one or two RBC employees return from holidays in
Cuba each year with pictures of the bank's former head office, its name
still carved in the stone façade.
Scotiabank said that the new representative office would not conduct any
local transactions or direct banking services.
"The office will continue and, to the extent possible, will expand
Scotiabank's trade finance business with Cuba," the bank said.
According to the Cuban central bank's website, nine foreign banks
currently have offices in the country. They include Société Générale,
BNP Paribas, Spain's Caja Madrid and Quebec-based National Bank of Canada.
National, the smallest of Canada's big six banks by assets, said its two
employees in Havana are mostly involved in trade finance for food items.
It declined to elaborate "for competitive reasons".
President Raúl Castro has opened the way for individuals to buy and sell
their homes for the first time since the revolution in the latest
market-oriented reforms aimed at reviving Cuba's moribund economy.
Other initiatives have included cutting subsidies, slashing state
payrolls and liberalising small businesses.
Numerous Canadian companies have invested in Cuba, mainly in the tourism
Toronto-based Sherritt International is the largest independent energy
producer and operates a nickel and cobalt mine on the island. Air Canada
has daily flights between Toronto and Havana.