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News: Economy

Venezuela Buys Bank of Venezuela for $US 1.05 billion

Mérida, May 25th 2009 (Venezuelanalysis.com) -- The Venezuelan government will pay the Spanish Santander Group $1.05 billion for the Bank of Venezuela, which was nationalized on July 31st 2008.

Venezuelan Finance Minister Ali Rodriguez, Venezuelan Vice President Ramon Carrizalez, and the president of the Bank of Venezuela, Michel Goguikian, cordially signed the agreement last Friday in front of television cameras.

Venezuela will make the first payment of $630 million on July 3. Then it will pay $210 million on October 3 and on December 30 of this year.  

"The bank of Venezuela is one of the strongest Banks in the national financial sector. We are acquiring it as part of the integral development strategy of the country, because the financial sector is the great driver of the economy... the Bank of Venezuela will strengthen the public financial sector," said Carrizalez upon signing the accord.

Carrizalez guaranteed that neither the workers nor the clients of the bank will be negatively affected by the ownership transfer. "We want to convey confidence and calmness to the workers as well as the clients of this financial institution," he said.

Ricardo Sanguino, the president of the Finance Commission of Venezuela's National Assembly, said the nationalization of the bank "will permit an increase in the amount of credits directed to productive activities."

Goguikian called the deal "extremely satisfying." The Santander Group had been looking to sell the bank in the months leading up to last year's nationalization.

President Chávez commented that the nationalization of the Bank of Venezuela means it "becomes a bank of the people, because what is of the government is not truly of the government, it is of the people."

The 118-year old Bank of Venezuela was privately owned until 1994, when the Venezuelan government became the majority stockholder. Two years later, the Santander Group acquired 96% in a re-privatization of the bank. It is Venezuela's third largest bank, holding 11.3% of total deposits in Venezuela in 2007, according to company financial reports.

Published on May 25th 2009 at 5.12pm