NCB sold, now Bank of St. Vincent and the Grenadines

Prime Minister Dr. Ralph Gonsalves has said that he believes the new financial institution, which is to be named the Bank of St. Vincent and the Grenadines, will be bigger, stronger and better than the current National Commercial Bank (NCB).{{more}}

Gonsalves, speaking at a press conference yesterday, Monday, October 4, at Cabinet Room, announced that the East Caribbean Financial Holding Company Ltd. (ECFH) of St. Lucia has acquired 51% shares in the National Commercial Bank of St. Vincent and the Grenadines. The ECFH is the parent company of the Bank of St. Lucia.

Gonsalves said that the Unity Labour Party (ULP) had been waiting on the right moment to divest the shares of the NCB, and that there were four instrumental factors that led to the decision.

“(i) The strengthening of the bank since 2001, (ii) The agreement of the Caribbean Development Bank (CDB) to assist in the process of divestment, (iii) The inducive external financial economic environment, and (iv) The regional financial institution; The Bank of St. Lucia which would provide the correct fit at the fair and reasonable price for the majority shareholding, combined with other favourable conditions,” Gonsalves said.

“I had to get a good partner, a good fit; other partners came courting, but like in anything else, when you are desirable… a lot… will come, but you will reject several until you find the right one. I’ve found the right partner.”

The Prime Minister said that although the intentions of his administration were to divest the shares of the NCB at some point, he had to make the bank more viable in order to get the most from suitors.

According to the Prime Minister, the bank is in a better financial position now than it was in 2001 and listed a number of issues that had to be rectified before any ideas of divestment could have been entertained.

“In 2001, the NCB barely met the regulatory capital requirement of 8% of tier one capital…. In 2009, the tier one capital was 23.8%….

In 2001, the total deposits of the bank were 320.8 million dollars. By 2009 it had jumped to 674.1 million dollars; that is to say more than doubled in nine years.

In 2001, total assets of the bank were 395 million. In 2009 their assets had increased to the sum of 813 million.

In 2000 there were 139 employees at the bank receiving an annual salary of 4.6 million dollars. By 2009, there were 196 employees receiving an annual salary of 12.4 million dollars…. At the instance of my government, a pension scheme was put in place in 2003, backdated for 15 years, funded entirely by the bank in the sum of 2 million dollars….

So Many things were wrong with the bank in 2001,” Gonsalves stated.

Gonsalves also defended the criticisms that the country’s national pride is being tarnished with the divestment of shares of the National Commercial Bank, referring to the criticisms as the lowest form of politicking.

“What I call offensive to national pride is to engage with foreigners to put something on the internet to save democracy for $5 when in fact you’re selling it…. When you want to take my citizenship and sell it…. That is what is offensive to national pride,” he said.

“You can’t tell me you going to sell citizenship, and you don’t want to sell 51% of the shares to the parent company of the Bank of St. Lucia, in which the NIS and the NCB own 5%. And you can’t tell me you don’t want that, when in fact, the NCB and the same Bank of St. Lucia and three other banks have gotten together to buy the Bank of Antigua after its collapse to help to save the banking and financial system.

“We are going in a visionary way; and that is the way of progress,” the Prime Minister stated.

Gonsalves informed the media that the Bank of St .Vincent and the Grenadines will have seven directors: two from St. Lucia, two from St. Vincent and the Grenadines, with three others representing the other shareholders (Government, the National Insurance Services and public shareholders).

He said that the public offerings for the shares will ensure that the “small men and women will get shares” and that an education programme on the public offering will take place.