Lawrence Duprey

By Anthony Wilson

In the wake of CL Financial’s acquisition of majority control of Republic Bank, the group’s chairman Lawrence Duprey said his intention now is to make the bank a global financial player.

Duprey was speaking exclusively with the Business Guardian on Tuesday night from his hotel in London.

He had just returned from a trip to Japan where he took delivery of two methanol tankers, total cost US$120 million, which are owned by Methanol Holdings, in which his group has a significant interest.

Since Duprey was in Trinidad three weeks ago, he had also visited China where he expects to open an office in Hong Kong, at Pacific Place in the heart of the city’s financial centre.

When Duprey called at 2 am Wednesday morning London time, however, he was more concerned about giving his perspective on his group’s $1.3 billion acquisition of the 10 per cent block of Republic Bank shares.

The share purchase, which was substantially reported first in the Guardian on October 30, means CL Financial now owns 53 per cent of the issued share capital of Republic Bank.

This is enough to make T&T’s second largest bank after RBTT a subsidiary of Duprey’s group.

Addressing concerns that he might seek to exercise operational control of Republic now that he has majority ownership, Duprey pointed out that his group had been in control of the bank for years and had abided strictly to the terms of a 1997 standstill agreement.

That agreement prevents Duprey from exercising day-to-day control of the bank.

“Right now, we are in the process of taking Republic global. We believe the banking landscape in T&T and the region will change to keep in sync with what’s happening globally,” said Duprey.

He added that “we have to position ourselves to take advantage of global opportunities,” and that he was “working closely with the present management” of Republic Bank to ensure that his global vision would be brought to fruition.

Questioned on reports that Republic Bank was already in discussions with a large global player, Duprey said he “believed” that the bank’s executive chairman Ronald Harford had been speaking with the Bermuda-based Bank of Butterfield.

Contacted Tuesday, Harford said he was not in a position to discuss the rumours of the bank’s discussions with Butterfield.

Duprey, however, completely ruled out the possibility that CL Financial’s investment in the local bank could be traded for a stake in a merger between Butterfield and Republic.

“We would not sell our holding in Republic Bank Bank as we consider that to be one of our mainstay investments. It is a fundamental investment for Colonial Life.”

His vision, Duprey said, was to develop local companies and make them global and as such “we would not surrender a stake in T&T for a global stake.”

Although Duprey is the chairman of CL Financial and Clico, the group’s insurance giant, as he has developed the methanol companies and Angostura into global entities, he has left the management of the group’s T&T business to Louis Andre Monteil, his trusted lieutenant.

Having pushed the group’s energy and alcohol holdings to develop globally, Duprey said he now sees financial services as being the third leg of the group’s global expansion. Republic, he said, would be at the pinnacle of CL Financial’s global provision of financial services.

As such Duprey does not see a merger of Clico and Republic Bank as being “on the cards” as the two companies can be “operated separately with different types of management.”

Duprey admitted that he is constantly on the look out for opportunities as he seeks to spread the group’s financial risk geographically.

“As we come upon opportunities, we look to take advantage of them before they become too expensive.”

While stating that the CL Financial group did not have a war chest for global acquisitions, he did allow that its methanol and ammonia holdings “were cash positive by hundreds of millions of dollars” because of the high global prices of those commodities.

Even so, he said the $1.3 billion price tag for the 10 per cent of Republic has been financed by borrowings “in the first instance, until we can make the necessary adjustments, locally.”

What about the share price?

Republic Bank’s share price, which has moved doubled to $86.60 in just over a year, is expected to be under considerable upward pressure in the near future.

Apart from the acquisitions of banks in Barbados and the Dominican Republic in that period, Republic also still has some 70 million First caribbean International Bank (FCIB) shares.

FCIB shares are likely to appreciate in price because of the large one-time gain it will take as a result of the sale of the 16 million Republic Bank shares.

As FCIB shares increase, Republic will benefit from the increase in their value.