Bank of SVG Ltd to launch at month’s end

The Bank of St.Vincent and the Grenadines Limited is to be officially launched on Monday, May 30.{{more}}

This was disclosed by a senior executive at the Bank, formerly known as the state owned National Commercial Bank (NCB).

When SEARCHLIGHT contacted the Bank this week, senior staff were discrete with information on other activities in an effort to launch with a bang later this month.

At a press conference on, Monday, October 4, Prime Minister Dr.Ralph Gonsalves announced that the East Caribbean Financial Holding Company Ltd. (ECFH) of St. Lucia had acquired 51% of the shares in the NCB for EC$42 million, at EC$8.24 per share. The ECFH is the parent company of the Bank of St. Lucia.

Gonsalves’ announcement had immediately created a stir among critics of his Unity Labour Party (ULP) administration.

But by Friday, November 12, the deal was sealed when Gonsalves and Robert Norstrom, the Group Managing Director of ECFH, signed the Sales and Purchase Agreement and the Shareholders’ Agreement.

Gonsalves had also explained in details, why the majority shares at the NCB had to be divested.

At the time, he stated that the 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.

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 had attained a better financial position when it was sold than when his adminsitration took it over in 2001 from the New Democratic Party (NDP) administration.

Gonsalves had 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.

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 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.

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.

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, said Gonsalves.

The Bank of St. Vincent and the Grenadines Limited 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).