KINGSTOWN, St. Vincent – The National Insurance Service (NIS) yesterday formally received about 9 per cent of the shares in the former National Commercial Bank (NCB) as divestment of the financial institution continues.
NCB, formerly owned by the government, in November 2010 sold 51 per cent of its shares to East Caribbean Financial Holdings to become Bank of St. Vincent and the Grenadines (SVG).
The 9 per cent of the shares being bought by the NIS will be sold at EC$8.23 per share, the same rate at which former NCB employees were offered shares in the company.
“But when we are going now for the other 20 per cent, because we are going on the regional market to sell those shares, we have to get a proper valuation of those shares,” Gonsalves said at a signing ceremony on Tuesday.
He said that workers at the bank did not buy the entire 4 per cent of the shares offered to them. The NIS bought most of that 4 per cent and is holding a further 20 per cent of the shares that the government also plans to divest.
“But we can’t hold the remainder indefinitely. So, of the remainder, there will be 50,000 shares which will be available further for bank workers of the original allocation of 400,000 shares for them – 40 per cent,” said Gonsalves, who is also Minister of Finance.
Gonsalves said there continues to be “a lot of falsehoods being spoken about” why the NCB was privatised.
“… small, stand-alone banks, in a world where you are having a concentration of banking capital … had a very difficult time,” he said.
And while the Caribbean Development Bank (CDB) loan the Gonsalves government EC$100 million to facilitate the privatisation of the NCB, he said the CDB is turning away other banks with similar requests.
“CDB is saying, the National Commercial Bank, whatever its liquidity challenges, … the management of the bank was in good hands, and … the board was a very good board fit for the purpose of a bank.”
Gonsalves also said member of his Cabinet, while describing the decision to privatised the NCB as the “correct” one, was worried that it was being done weeks ahead of the December 2010 general elections.
“‘The other side would go on with their chauvinism and their petty nationalism. We are going to get a hard hit at the election,’” Gonsalves quoted Cabinet colleagues as saying.
“I said, ‘Good policy is good politics and I trust the people of St. Vincent and the Grenadines. I will explain the decision to them,’” who Unity Labour Party won the election by a single seat.
With the transfer of the shares to the NIS, the government’s take in the Bank of SVG now stands 29 per cent.