SVG Sells State-Owned Bank

by Phillip Morton, Investors Offshore.com

12 October 2010

The government of Saint Vincent and the Grenadines has announced that, through an agreement with the Bank of Saint Lucia’s parent company, it has privatized the state-owned bank, the National Commercial Bank (SVG).

According to a joint statement, the purchase of 51% of shares “followed an invitation by the St Vincent and the Grenadines’ government to consider acquiring an interest in the state-owned bank.” East Caribbean Financial Holding (ECFH) Limited, the St Lucian bank’s parent company considered the purchase to be “in line with the St Lucian bank’s vision of regional expansion, and in support of the Eastern Caribbean Central Bank’s efforts at strengthening the banking system through mergers and alliances,” and therefore “was pleased to accept the invitation”.

The agreement will see ECFH holding a majority ownership interest of 51%. The government of Saint Vincent and the Grenadines will retain the balance of shares (49%), with the intention of divesting an additional 29% of their shares to the St. Vincent and the Grenadines National Insurance Service (NIS), and to citizens of St. Vincent and the Grenadines, including bank staff and citizens of the region within the next twelve months. All formalities of the acquisition are expected to be finalized by October 31, 2010, the joint statement says.

The statement concludes: “The deal is subject to regulatory approval of the ECCB; however, these approvals are expected to be forthcoming. ECFH remains adequately capitalized and continues to generate steady returns to its shareholders despite the economic downturn.”

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