Eustace saddened by move to sell NCB
September 28, 2010
Eustace saddened by move to sell NCB

Opposition Leader Arnhim Eustace is saddened by the move to privatize the National Commercial Bank (NCB) – an institution he calls one of St.Vincent and the Grenadines’ “national treasures”.{{more}}

Last Thursday evening at Green Hill, Eustace criticized Prime Minister Dr. Ralph Gonsalves, who also holds the portfolio of Minister of Finance, for mismanaging the bank. He described the situation as “painful”.

Eustace said Gonsalves recently borrowed $100 million from the Caribbean Development Bank (CDB) to repair damage to the NCB. Damage, he believes, the Prime Minister should accept full responsibility for.

“It is almost unbelievable. Just two years ago, he was bragging and say they making $15 million profit and today the bank is to be sold,” said Eustace.

“I want people to understand that [it] is Government debt that is being repaid by this $100 million. I want you to also understand that the loan of $100 million is to the Government, not to the bank,” said Eustace, noting that the NCB does not have to repay the loan.

“It is the Government of St.Vincent and the Grenadines that has to repay the loan, which means that you, the tax payer, have to repay the loan.

“And why you have to pay back $100 million? Because Ralph Gonsalves mash up the bank,” said Eustace.

Speaking of Government debts that the CDB loan will be used to repay, Eustace, citing the Estimates of Revenue and Expenditure 2010, page 697, said: The Arrowroot Association has an overdraft of $355,000; Housing and Land Development Corporation (HLDC) $2.7 million and $3.188 million; National Fisheries $606,000; Food City $2,867,000 and the St.Vincent and the Grenadines Postal Corporation $1.4 million.

On the issue of loans to be repaid, Eustace said: The Arrowroot Association – $200,000; Carnival Development Corporation (CDC) – $113,000; Central Government – $24,290,000; HLDC – $12 million; Kingstown Board $7 million; National Properties $17,077,000, and $47 million owed to the National Insurance Services; National Properties for Food City – $2.6 million; and St.Vincent and the Grenadines Port Authority – $13,329,000.

He said National Properties has nothing to justify the loans that have been awarded to the institution.

The Opposition Leader said in order to get the CDB loan, the Government had to agree to sell the National Commercial Bank (NCB).

Prime Minister Gonsalves responding to Eustace’s statements yesterday, said they are “strongly desperate. The signs of a desperate man.”

Gonsalves said the NCB in the year 2010 is stronger by far than the NCB when he got it in March 2001.

He said the extent of Government’s equity with regard to value was just over $20 million in 2001; at the last valuation, this stood at $84 million.

Gonsalves said the deposits have more than doubled, similarly the assets.

The Prime Minister added that in 2001, when he took over the bank, the Public Sector Loans (Central Government and statutory enterprises) were in the region of $110 million or 42 per cent of total deposits.

“When we presented our document at the Caribbean Development Bank (CDB) for the loan it was a $160 million, the Public Sector debt. Of course numerically higher than $110, but 28 per cent of total deposits. In other words, of the deposits which people made in the bank, the Government in 2001 under Eustace owed more money proportionately than today,” said Gonsalves.

Gonsalves remarked: “Mr.Eustace is really shameless when he talks about the bank. In three years, 97, 98, 99, the auditors gave the bank’s accounts a qualified report. You know what that means? When your auditor gives you a qualified statement, it means that they are not satisfied with the state of the accounts of the institution and one of the real problems is that they were not making provision for ‘bad debts’.

The Prime Minister said in the 10 years since he has been Chairman of the NCB, the bank has never had a qualified report.

Regarding the move to privatize the bank, Gonsalves said this is necessary to put the bank on a stronger footing.