- Written by AMANDA ULRICH
- Published: 20 December 2017
This week the Social Security Board became a minority shareholder in the National Bank of the Virgin Islands, investing $15 million for a 33 percent stake, with plans to add three SSB representatives to the bank’s board of directors.
Though the SSB has invested with the NBVI before, and owns shares in several international banks, this marks its first local equity investment.
During a signing of the investment agreement on Tuesday, SSB Chairman Ian Smith said the decision was made to invest more funds locally.
“These investments have stimulated the economy through the creation of jobs and increases in loan funds available by the local bank to lend to individuals seeking to improve their personal and economic position,” Mr. Smith said.
In May, the Development Bank of the Virgin Islands Transfer of Assets and Liabilities (Amendment) Act 2017 was passed to allow the SSB and other statutory bodies and companies in the territory to become shareholders in the bank.
But Mr. Smith and NBVI Chairman Clarence Faulkner said that their agreement has taken more than two years to finalise.
“The Social Security Board did its due diligence,” Mr. Smith said. “And an investment in the National Bank of the Virgin Islands was deemed viable, and negotiations began way back in late 2015.”
Though the bank said it now has more money available for loans, officials would not say that interest rates will decrease as a result.
Mr. Faulkner said the bank’s credit department will determine the most applicable rate depending on the type of loan.
In terms of the hefty investment pushing forward new products and services offered by the bank, Mr. Faulkner could not give an exact timeline for those initiatives, instead saying that they require a lot of “infrastructural work.”
“Am I going to predict that it’s going to be tomorrow rather than a year from now? No. But I know the team at the bank is working tirelessly to be able to launch,” he said.
“I have no problems coming to the public and saying [new products] are going to be a month late, because we still have to ensure that when you put your card in the machine or swipe it somewhere around the world, it must do what we expect it to do.”
The three new additions to the NVBI board (made up of nine people total) will have to be approved by the Financial Services Commission, Mr. Smith added, and will give “additional strength” to the financial expertise of the bank.
Asked how SSB interests will influence bank services or products, Mr. Faulkner said the “strategic direction” of the NBVI will remain intact.