SVG nationals urged to buy shares in local bank

KINGSTOWN— Prime Minister Dr Ralph Gonslaves is urging nationals to purchase shares in the Bank of St Vincent and the Grenadines that on Monday launched an initial public offering (IPO) hoping to raise expansion capital of more than EC$17 million (one EC dollar = US$0.37 cents).

The former state-owned bank, is offering two million shares at a price of EC$8.64 and Gonsalves told a news conference “it is not a bad investment. “For the first time, Vincentians would have the opportunity to be a part of the share owning class in a banking institution. So this is the first time we are having a commercial bank providing the opportunity for ordinary Vincentians to be part of the share-owning class.

“The people of this country will enhance their stake in the bank, not only through the government or the NIS, but generally speaking,” he said. In November 2010, the government announced it had sold controlling interest in the financial institution to the East Caribbean Financial Holding Company Ltd (ECFH), parent company of the Bank of St Lucia at a cost of EC$42 million.

Gonsalves said then the government would retain 49 per cent of the shares and divest 29 per cent of those shares to the country’s National Insurance Service and citizens of SVG and the region within the next 12 months.

On Monday, he defended the decision to sell the shares to the ECFH, in keeping with the policy of the Eastern Caribbean Currency Union  (ECCU) to consolidate indigenous banks, telling reporters that a few years ago, a Trinidad-based bank, which he did not name, had offered EC$500,000 for the entire bank.

“It is hope that this IPO can facilitate share holder democracy as it encourages the Vincentian firms and entities to undertake other Vincent firms and entities to undertake the same step of going of going on the Eastern Caribbean Stock Exchange.

“The Bank of St Vincent and the Grenadines IPO empowers Vincentian and other investors in the Currency Union an opportunity to become owners of a company with strong ties and a long rooted history in many facets of development within St Vincent and the Grenadines”. He told reporters that as a listed company, the bank allows stock holder access to a regional market place with greater liquidity.

Gonsalves said that the St Vincent and the Grenadines government holds 40 per cent of the shares in the bank and has already received dividends of more than EC$1.6 million during an 18-month period. He said given the dividends for the first half of last year amounted to EC800, 000, he is anticipating a similar figure for the remainder of 2012. “Which means in two years, we would have picked up EC$2.2 million from the bank,” he said.

Caribbean360