By Vivian Tyson
SUN Associate Editor

The Royal Bank of Canada, which is due to set up shop in the Turks and Caicos Islands later this year has finalized a merger with the Royal Bank of Trinidad and Tobago (RBTT), in an effort to catch up with its rivals in the Caribbean Region, under a cash and shares deal valued at around TT$13.7 billion (US$2.2 billion), according to a report on Royal Bank's website.

The deal, which was being worked out for months and finalized on Monday, June 17, gives the new RBC Caribbean 130 branches across the region, assets of US$13.7 billion and 1.6 million clients. Both banks however, will continue to operate under their respective brand names, Royal Bank said.

The merger has placed RBC/RBTT ahead of the CIBC-owned FirstCaribbean International Bank - which commands assets of US$12 billion, and has 100 branches in 17 countries - in the regional banking sector, but behind Scotiabank whose network is the most expansive, numbering 200 branches across 21 markets, and assets of some C$17 billion.

"RBTT's network complements our Caribbean retail banking operations perfectly," said Jim Westlake, RBC's head of International Banking and Insurance.

With the merger RBTT has joined a banking group that is number one in its home market, and has 75,000 employees in 47 countries.

"RBC and RBTT are both very strong brands with which we are very happy," said Paul Charles, head of RBTT group communications. "We, therefore, have no immediate plans to re-brand. For now, we will continue to operate under our respective names, and during the integration we will determine the re-branding strategy."

Adding RBTT also may allow Royal Bank's expansion into Latin America, said Peter Armenio, head of U.S. and international banking for the bank.

The Canadian bank has said it plans no retrenchment of RBTT staff, which numbers about 7,000 across the region. Charles also said the same holds for the merged bank's country managers in the 17 markets where RBTT operates commercial banks and that the only movements would come from "normal activity" such as retirement or promotions.

The RBC/RBTT merger deal has closed eight months after its October 2007 announcement. RBTT shareholders will receive about TT$40 ($6.37) a share, 60 percent of which will be in cash and 40 percent in Royal Bank shares, Toronto-based Royal Bank said in a statement.

The amalgamation of the banks' operations will occur in the coming months, said a joint release from the parties to the deal, led by RBTT group CEO Suresh Sookoo, and RBC's current head of Caribbean banking, Ross McDonald, who "will share responsibility for leading a smooth transition."

Senior management from both organisations will be integrated, the release said.

Sookoo will head the new RBC Caribbean, whose corporate headquarters will be Port of Spain .

RBTT has Canadian roots. It was incorporated in Halifax , Nova Scotia , in 1856 and was owned by Royal Bank before the lender sold control in 1986, said Brad Smith, an analyst at Blackmont Capital in Toronto .