November 23, 2010
Government closes NCB deal with ECFH

It’s official. The Government of St. Vincent and the Grenadines has closed the deal with East Caribbean Financial Holding Company Ltd. (ECFH), which saw the latter purchasing the 51 per cent shares of the National Commercial Bank (NCB) for EC$42 million, at EC$8.24 per share.{{more}}

This was done on Friday, November 12, when Gonsalves signed the Sales and Purchase Agreement and the Shareholders’ Agreement with Robert Norstrom, the Group Managing Director of ECFH. The bank will now be called the Bank of St.Vincent and the Grenadines Limited.

Responding to the question raised by some persons, as to whether the Government had received enough money for the 51 per cent shares sold, Gonsalves at a press briefing on Friday, November 19, said, “The fact is this: We did.”

He reminded the nation that banks trade at their book value and that of the NCB was in the region of EC$84 million.

Gonsalves said when his Unity Labour Party (ULP) formed Government in 2001, the book value of the NCB was approaching zero.

“If you wanted to sell fifty one per cent then, you would have got a number close to zero. We had to build up this bank and we build it up better, bigger, stronger,” said Gonsalves.

He compared the value of the shares to the Barbados National Bank, for which the Republic Bank of Trinidad and Tobago recently offered just over B$5.00 or EC$7.00 a share, even though that bank is much larger than the NCB and operates in a larger economy.

The Prime Minister said the bulk of the funds derived from the sale of the bank will go towards the International Airport Development Company (IADC) and Capital Projects, while a portion will go towards the Economically Disadvantaged Student Loans.

He said EC$8.25 million will be left in the bank in relation to the student loan programme. However, that money will not be left there permanently.

“Every year, we are going to look at the extent of the delinquency, that is to say the bank and the Government. If the delinquency on those Economically Disadvantaged Student Loans is less than ten per cent, we will take out from the fund of EC$8.25 million (20 per cent of the money) and transfer it to our general account. And we will do that every year until what would be left in that guarantee fund for the student loans would be just EC$825,000,” said Gonsalves.

Twenty five per cent of the Economically Disadvantaged Student Loans amounts to EC$8.25 million, with its current figure totalling EC$33 million. The regular student loan programme amounts to EC$22 million. (HN)