August 16, 2013

ECCB takes over two largest banks in Anguilla

The Eastern Caribbean Central Bank (ECCB) on Monday assumed control of the two largest financial institutions in Anguilla, which together account for 76.7 per cent of the total assets of that territory’s banking sector.{{more}}

The Caribbean Commercial Bank (Anguilla) Limited (CCB) and the National Bank of Anguilla Limited (NBA), both indigenous banks, were taken over by the ECCB on Monday, a release from the ECCB said.

Governor of the ECCB Sir Dwight Venner, in a statement said this action was taken because of the major impact the global crisis has had on the growth of the tourism and construction sectors, on which the economies of the Eastern Caribbean Currency Union are mainly dependent. He also said growth in Anguilla has virtually collapsed, falling from an average of 15.8 per cent between 2005 and 2007 to an average contraction of 5.5 per cent for the period 2008- 2012; and the banks have seen their non-performing loans escalate to levels beyond the guidelines set by the Central Bank and this in turn has resulted in the banks not meeting their capital requirements.

Venner said The objective of the assumption of control is to stabilise and restructure both banks and return them to a state of normality; protect depositors and creditors; and ensure the stability of the banking system in Anguilla and by extension the entire currency union.

Chief Minister of Anguilla Hubert Hughes in a statement said in recent times there has been great unease about the operations and performance of the two indigenous banks. He said Anguilla’s reconstruction on sustainable basis ultimately will hinge on a vibrant private sector driven tourism in the short to medium term and diversification into other areas over the long-term. Hughes said to facilitate this private sector development, Anguilla needs investment in critical areas such as air and seaport infrastructure as well road development. He called on the United Kingdom government to partner with them in this regard.

Hughes also appealed to the citizens and residents of Anguilla for understanding, patience and support as they worked to “resolve the issues that led to the need for this course of action which has been taken with the interest of the people of Anguilla in mind.”