Canadian banks warming up to Cuba

By John Greenwood

From the Financial Post

Three of Canada’s big banks are quietly building relations with Cuba as the Caribbean nation edges closer to free market reforms, according to the Financial Times.

After an absence of more than 50 years Royal Bank of Canada and Bank of Nova Scotia are both exploring opportunities that have opened up under the leadership of President Raúl Castro, the newspaper said.

Scotia recently applied to set up a representative office in Havana focused on trade finance while Royal Bank is said to be in the early stages of a potential venture in Cuba.

Both banks had operations in Cuba in the last century but were forced to abandon them when Raúl’s brother Fidel Castro came to power in 1959.

National Bank of Canada also has a small operation in Havana doing mostly trade finance, the Financial Times said.

Since Fidel Castro took control Cuba has mostly been off limits to western business, though that has changed in over the past decade or so as companies such as Sherritt International of Toronto set up operations there.

Despite considerable wealth in natural resources – Cuba is home to one of the world’s largest nickel-cobalt mines – the country of 11-million people remains impoverished.

Recent economic reforms instituted by Raúl Castro have sparked excitement and anticipation that Cuba will eventually open up to private enterprise, creating opportunities for not just for mining and energy companies but also banks that provide financing for such operations.