Canadian Imperial Bank of Commerce (CIBC) said on Wednesday it will not proceed with the sale of its majority stake in Barbados-based CIBC FirstCaribbean to GNB Financial Group Ltd after the deal did not get local regulatory approval.

CIBC had agreed to sell 66.73% of its stake in CIBC FirstCaribbean to GNB Financial for $797 million in November, 2019.

The component of CIBC's business which housed FirstCaribbean contributed less than 3% to CIBC's revenue in the fourth quarter of 2020.

Barclay's equity analyst John Aiken views the rejected sale as a negative since operations of the bank in the region face difficult challenges, according to a research note seen by Reuters.

CIBC is not the first such Canadian bank to face challenges when it comes to divestiture of it Caribbean operations.

Scotiabank's sale of its operations in Antigua and Guyana hit a roadblock in 2019 when it failed to get regulatory approval, but the bank managed to sell its Antigua operations in October last year.

In December, 2019, Royal Bank of Canada said it had entered into agreements to sell its Eastern Caribbean operations to banks in the region, subject to regulatory approval.