With October, the Financial Month of the Eastern Caribbean Central Bank, just around the corner, some persons are reportedly wondering whether there will be anything different with respect to the continuing conservatorship of the island’s two local banks, CCB and NBA. For whatever reason, others think this is not likely.
Meanwhile, two shareholder committees, looking at the situation of the two banks, were represented at a press conference on Friday, September 18. Appearing on their behalf were Mr. Leslie Richardson, representing the CCB committee, and Mr. Kennedy Hodge, representing the NBA shareholders’ committee. The event was organised by talk show host, Mr. Elkin Richardson.
The main talking points by the two speakers included concern about the non-release of the “financials” of both banks since the takeover of the institutions just over two years ago. The requested, but denied, financials are said to be needed to enable shareholders to be informed about the actual fiscal state of the banks, and how shareholders may endeavour to examine the way forward and even set about to fixing the problem, including an option to re-capitalise the banks themselves. The committees through their two spokesmen also complained that from the inception of the conservatorship of the banks, shareholders have been excluded from all matters related to the financial institutions; and they expressed opposition to any planned merger of the banks.
Mr. Richardson, addressing the media representatives, stated in part: “Where we [CCB and NBA] are today, really in fact, and in truth, has nothing to do with the status of the banks. Yes, we were facing challenges with respect to our delinquent loans, but this is a common thread which runs not just through this region, but through the world. How did the others fixed theirs? Not by taking over banks but, from a government standpoint, affording funds to help bail out these banks. In our case, rather than doing that, we are told that we must merge our banks into one larger bank. I say hell no! Our banks are responsible for 76% percent of credit in Anguilla – the CCB and NBA I am talking about – and 83 percent of our deposits.”
Mr. Hodge said among other things: “The reason we are here has nothing to do with the contention that something is so drastically wrong in our banks that we in Anguilla cannot fix it. It has to do with the objective of merging of the two banks. On the day of the Central Bank’s intervention in Anguilla, the NBA committee of shareholders, who are not involved in the Board or the management of the bank, were formed to approach the National Bank of Anguilla to come up with solutions…Our shareholder group was invited to meet with the Central Bank’s intervention team on the day of the takeover. Around mid-afternoon we were called and told the time to meet with the team is now. We went down to the Executive Council’s Chambers…and met with them. Pretty much, the very first thing that the Central Bank Governor, Sir Dwight Venner, said at the meeting was: “the two banks are going to have to merge – you know that”?
“It is now two years since the intervention, with no financials presented to anybody, and there is no report that the shareholders have seen, but yet he knew, within a couple of hours of the intervention, that that was the solution – the two banks were going to have to merge. That shows that was the objective to begin with because they had not yet assessed the banks.”
Mr Hodge continued: “The situation that Anguilla is in is not limited to just the banks…The banks are the crux of it. The fact is that the vast majority of impaired loans at the banks [involve] ordinary people who borrowed money to build their houses…It is not just about saving the banks. You can save the banks and then a thousand people lost their homes – so what happens then? So it is a wider picture. The most critical aspect of all has been the exclusion of Anguillians from solving an Anguillian problem. This is mindboggling and I can’t understand it. We got into a problem and the shareholders of the banks, and the people of Anguilla at large, have been excluded from the beginning, to the present, from being involved in the resolution of the banks.”
Mr Richardson and Mr. Hodge released a set of letters written this year to the Ministry of Finance in Anguilla requesting meetings and information. They were able to secure two meetings in June and requested copies of the financials for CCB and NBA in accordance with the law. “It is almost a month past two years, since the ECCB intervened in Anguilla and no financials have been presented to anybody. Not even the Ministry of Finance, we are told, had the financials up until June 19 when we filed the request…,” Hodge reported. He said that a follow-up letter was sent to the Minister of Finance, Mr. Victor Banks, on July 17, reiterating the request for the financials. “To this date, 18th September, we have still received no response,” he stated.
Mr. Hodge referred to other letters in which they said, among other matters, that the committes were not in support of merging the two banks. He charged that the banks were not given a chance to re-capitalise themselves. “The Central Bank wrote CCB and NBA in July 2013 telling them that they had to raise a certain amount of capital, and gave them one month to do so; and then intervened before that month was up…,” he told the media. “The shareholders, who would have been the next step in the path to re-capitalising the banks, have been totally excluded from the process.” He stressed that both banks have the solutions to their problems and in their letter of July 17 they had clearly listed a sequence of solutions that could be done right here in Anguilla. “We are being rolled up,” he alleged. “For example, the banks are major owners of other major companies in Anguilla that can be used to raise funds to put into the banks, but the shareholders are also being denied access to those companies.”
Mr. Richardson disclosed that in a letter to both banks, the Central Bank said CCB needed to be re-capitalised by 70 million US dollars and NBA by 60 million, “but fixed at the time at an overall 50 million.” He said that was confirmed by the Minister of Finance, Mr. Victor Banks, who later said the fixed amount was US$25 million instead, as the situation “was not as bad as it was initially”.
For one thing, both Mr. Richardson and Mr. Hodge emphasised that they, and the committees they represent, are strongly opposed to any merger of the two banks which they alleged would then operate in concert with the St. Kitts-Nevis- Anguilla National Bank in Basseterre, St. Kitts.
Meanwhile, Mr. Banks told The Anguillian that he would give a formal response to the various issues raised by Richardson and Hodge later on. He said the merger of the banks was not anything new, as the matter had been proposed some 15 years ago, and he indicated that such a step was a likely possibility. Asked about the ownership position of shareholders of the banks, he indicated that the first consideration was to protect depositors, stabilise the banks, and then look at the interest of shareholders.
Recently, Mr. Banks said publically that the Government of Anguilla was seeking to obtain up to 25 million dollars to re-capitalise CCB and NBA.
