NCB: Divestment is a good fit

The similarities between this country’s National Commercial Bank (NCB) and its new majority shareholders, East Caribbean Financial Holdings (ECFH), owners of Bank of St. Lucia, are what make the divestment a good, vibrant and dynamic mesh.{{more}}

CEO of the NCB Andre Iton stated at the press conference held this Tuesday, October 12, at the bank’s headquarters on Bedford Street, that the indigenous foundation of the national banks in the OECS shared common structures and operating platforms which would make for a seamless fit.

According to Iton, the National Commercial Bank of St. Lucia, which was taken over by ECFH in 2001, had the same genesis as this country’s NCB.

Because of this, the move, which officials believe is due, will improve the operation systems of the new entity, as well as introduce new and innovative products, and in the process improve efficiency.

“We think there are lots of reasons why it will work,” Iton noted. “Ultimately this objective is to increase the soundness (and) the operative capacity of the bank. To derail it will not be to the benefit of anybody.”

“To try to say that the bank should stay as a stand alone entity which could have its biggest loan limit at ten million dollars with no capacity to increase its capital base is to say that we do not want our institutions to be part and parcel of development.”

Iton had earlier indicated that with a net capital of about $80 million, the NCB can only lend to any individual group up to 25%, which may not be enough for any major project, and would result in seeking funding from a foreign financial institution.

“What’s the whole pride about? Is it well placed pride if you want to do a project of $25 million; this is beyond the capacity of the national Bank that we are so proud of. It will go to one of the foreign banks because we do not have the capacity.”

“What we are doing (with the divestment) is setting it up where the bank can access capital more rapidly and more efficiently. Banking is about access to capital.”

Iton noted that the new majority shareholders should not be considered as ‘foreigners’, since a number of regional entities, including the NCB itself and the National Insurances Services (NIS), also hold shares in the ECFH’s Bank of St. Lucia.

He also said that Vincentians will also have the option to purchase shares in the new institution, which is to be named the Bank of St. Vincent and the Grenadines.

The move to privatize the NCB was considered ‘the last of the lot’ by Iton, who indicated that other national banks in the region have already gone through the process.

“When you hear the debate in this environment, you think we are doing something that is earth shattering.”

“What we are doing is making for the efficient flow of resources within the OECS at the level of the financial sector, and that is to be encouraged rather than discouraged, which seems to be the tendency at the moment in some of the discussions I have been hearing.”(JJ)