The National Bank of Industry and Commerce (NBIC) yesterday formally acquired the Guyana National Cooperative Bank (GNCB).
This takeover ends the latter's 33-years as a state-owned commercial bank, and represents the last privatisation in the financial sector.
A press release from the Privatisation Unit (PU) and GNCB yesterday announced the completion of the deal with NBIC which will now begin consolidating some branch operations. NBIC, said the statement, had paid GNCB G$2.72B for a guaranteed net asset position of G$2B. The net asset position would be confirmed by the audit firm Deloitte & Touche and the Office of the Auditor General.
According to the statement, the agreements were executed by Finance Minister Saisnarine Kowlessar who is also Chairman of the Privatisation Board, Managing Director of NBIC Michael Archibald, Executive Secretary and PU Head Winston Brassington and General Manager of the GNCB John Flanagan.
Prior to yesterday's privatisation, a Memorandum of Agreement was signed with employees on Monday last providing for the terms of their severance which the statement said would be calculated at the date of privatisation. They are expected to begin receiving their severance package shortly.
Stabroek News understands from staff sources that approximately 100 of the retrenched GNCB staff have been rehired by NBIC while some 40 will be kept on by GNCB as part of the entity which will monitor the collection of the bank's outstanding loan portfolio. The privatisation agreements exclude the loan portfolio and some real estate "not related to the branch network," according to the release.
This newspaper was told that GNCB, which is to continue to be managed by General Manager Flanagan, is expected to be housed at the former GAIBANK head-quarters in Parade street, Kingston.
Reached by Stabroek News for comment, PU Head, Brassington was of the opinion that the deal was a good one in the sense that GNCB would cease to be a loss-making entity and a drain on the treasury.
This, he said, would result in considerable savings to government which would consequently have achieved a structural benchmark as part of its HIPC arrangements.
Questioned on the position of the minority shareholders, namely the co-operative societies, Brassington said that the government had left a buy-out offer on the table for three months. According to the PU head, the shareholders have the option of either selling their shares to the government or to whomsoever else they choose.
Brassington said that all outstanding legal issues surrounding the sale of GNCB had been cleared up, and that the deal had been completely signed off and all monies paid up.
He further said that the bank was already in operation looking at arrangements for its functioning.
Stabroek News understands from an informed source that NBIC's MD Archibald was already touring branches yesterday to observe operations and make arrangements for a smooth takeover.
According to the release, this is expected to involve the consolidation of some branch operations in keeping with their policy of rationalising existing structures and systems to facilitate efficiency.
This period the release said, is expected to last approximately eight weeks during which the bank did not foresee disruption of its service. They are further urging customers to continue to conduct their business in the usual way unless being notified either through the press or post of NBIC's intention to institute changes relating to its operations.
According to the release, "the completion of the deal, marks an important milestone for the banking industry in Guyana as it recognises NBIC's reputation of financial strength in the local banking industry."
The deal, the release further stated, represents the last privatisation in the financial sector following those of GBTI, NBIC itself, GCIS, GNCB Trust the merger of GAIBANK and GNCB and the winding up of the Guyana Cooperative Mortgage Finance Bank (GCMFB).
GNCB had been experiencing losses for years due mainly to a large non-functioning loan portfolio. (Oscar P. Clarke)