Fidelity Bank & Trust and Royal Bank of Canada announce merchant banking joint venture
Fidelity Bank & Trust International Limited (Fidelity) and Royal Bank of Canada (RBC) (RY on TSE and NYSE), today announced the signing of a definitive joint venture agreement pursuant to which RBC will acquire a 50 per cent interest in Fidelity’s wholly owned Bahamas-based subsidiary, Fidelity Merchant Bank & Trust Limited. The transaction is subject to normal closing conditions, including receipt of all necessary regulatory approval, and is expected to be completed within the next three months.
The joint venture is intended to be called Royal Fidelity Merchant Bank & Trust Limited (Royal Fidelity) and will provide corporate finance and advisory, investment management, stock brokerage, share registrar and transfer agency, pension and mutual fund administration services to existing and new clients throughout the Caribbean.
RBC will transfer its Barbados investment management and trust business to a Barbados subsidiary of Royal Fidelity upon receipt of local approvals and licenses. Upon closing, Royal Fidelity will operate in The Bahamas and Barbados with assets under management and administration in excess of US$1 billion, with plans to open offices elsewhere in the Caribbean.
Michael Anderson, president of Fidelity Merchant Bank & Trust, will be president of Royal Fidelity. Both RBC and Fidelity will continue to operate their current retail banking and other businesses in the region under their respective brands.
Anwer Sunderji, chairman and CEO of Fidelity, said, “This transaction validates our strategy in deploying resources to build our merchant bank subsidiary, which has established itself as the leading investment advisor and wealth management institution in The Bahamas. Innovative products, solid advice and unparalleled service have been key to Fidelity’s success. Through this transforming partnership with Royal Bank of Canada, Royal Fidelity will gain access to significant financial and technical resources that will enable it to grow rapidly within and outside The Bahamas.”
“This transaction extends RBC’s growing financial services platform in the Caribbean, giving even greater access to the fast growing merchant banking and corporate advisory sector in the region,” said Ross McDonald, head of Caribbean banking, RBC. “We are impressed with Fidelity’s merchant banking operations and view this transaction to be strategically important to our expansion plans in the Caribbean.”
Royal Fidelity will be well positioned to take advantage of the growing number of investment and financing opportunities arising across the Caribbean. “The Bahamas, Jamaica, Trinidad and Barbados have been centres of several large mergers, acquisitions and related capital markets transactions in recent months and the expectations are that this trend will continue,” Anderson said.
The combination of RBC and Fidelity establishes a one-stop solution for medium- to large-sized corporate finance engagements. Royal Fidelity clients will now be able to obtain corporate finance services as well as corporate banking products, such as bridge loans, project finance, and term loans, along with wealth management and fiduciary services.
“Clients of the new Royal Fidelity joint venture will benefit from RBC’s financial strength and extensive experience and capabilities in global capital markets and Fidelity’s innovative corporate finance and successful wealth management experience,” Anderson said.
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