Building and Loan sets up recoveries company

The Building and Loan Association said Wednesday it has set up a recoveries company as part of measures to better manage non-performing loans.{{more}}

The statement, in a press release, came less than one week after R. T. Luke V. Browne, an economist at the Ministry of Finance, said two Building and Loan directors had “set up a private company to which millions of dollars worth of Building and Loan assets are being transferred”.

Browne, who is also a politician with the ruling Unity Labour Party, made his comments in a letter in The Vincentian newspaper on Friday.

But Building and Loan said in its release that it is continuing to work on its risk management policies and procedures.

This is with a view to ensuring that Building and Loan maintains “a sound asset base and guarantee the safety and soundness of our members’ investments,” the release said.

Building and Loan further said it is embarking on measures that will “enable management to better manage the issues of delinquency as it relates to non-performing loans.

“The most important of these measures has been the establishment of a Recoveries company by the Building and Loan Association with two of the current Directors also made Directors of this new entity. This is incorporated under the name R.R. Recovery Limited and dated 13 December 2012 and established for the purpose of Recovery of Delinquent Loans,” the release said.

“Some of these measures may be viewed as drastic, as they involve a radical shift from the old culture of the organization. However, these measures are necessary in order to ensure the long-term viability of the Association,” Building and Loan said in the release.

“We wish to assure members that whatever legal structure is designed to assist in the process, you can be guaranteed that all economic and financial benefits will accrue directly to the parent entity, which is the St. Vincent Building and Loan Association, the principal and sole owner of any subsidiary or related entity.”

Browne had accused Building and Loan of introducing a death benefit plan “in a desperate attempt to raise funds”.

But Building and Loan said the $50 per year each plan generates “would hardly improve the Association’s cash flow and liquidity.

“Several other new products and services all in keeping with the law and rules governing the Association have been introduced for the benefit of the Association’s members,” the release further stated. (kentonchance@searchlight.vc)