Prime Minister lauds Bank’s privatisation

At the recent launch of the re-branded Bank of St. Vincent and the Grenadines (BOSVG), the prime minister stood firm in his conviction that the privatisation of the national bank was the right direction in which to lead the country.{{more}}

The launch, which took place on Monday, May 30, was attended by high-ranking officials and other employees from the bank and 51 per cent shareholder Eastern Caribbean Financial Holdings (ECFH).

Prime Minister Dr. Ralph Gonsalves said that he forged ahead with last year’s sale of majority shares on the advice of several local experts in the financial and banking sector, despite being warned that the move could lose him votes in December’s general election.

“All of them [experts] were unanimous in the view that we should supersede… what we did made such fantastic sense,” said Gonsalves.

“If I was going to be wrong with the five most brilliant Vincentians available to me, well then I would have been satisfied in my error.”

He concluded that the decision had been the correct one after his party was re-elected to power last December.

The prime minister also explained that small banks, by their very nature, are under-capitalised – and the National Commercial Bank (NCB) had been no exception.

“The under-capitalisation was masked when there was a significant amount of liquidity. But from the moment the financial meltdown took place internationally… [it] metamorphosed into an economic depression… it meant the under-capitalisation was now complicated by a liquidity problem that left the bank exposed,” he said.

Gonsalves also revealed that in 2002, shortly after his government took over, Republic Bank offered him $500,000 for the NCB.

“The value of the NCB, when I got it, was a number approaching zero!”

He pointed out, however, that by 2010 the shareholder’s equity had reached EC$83 million.

He was adamant that had he not sold majority shares in November last year, the country’s financial system would have been weakened.

Gonsalves was also convinced that the move serves as a positive example for other regional indigenous banks.