The first new bank in more than two decades could be coming to the Virgin Islands by the end of the year.
VI residents won’t be able to open personal accounts in this bank, though, as the institution will cater exclusively to the roughly 475,000 business companies registered here.
Hong Kong-based financial services advisor Chad Holm gave a presentation on the bank last month at the annual BVI Business Outlook conference on Scrub Island.
Mr. Holm said that he and a “group of partners based in Asia” have raised the first round of capital and have applied for a licence from the Financial Services Commission. They hope the bank will be up and running by the end of the third quarter of this year.
The bank, whose name was not disclosed, will not have a physical location in the VI.
“You won’t see a branch with our name on it anywhere in the world,” said Mr. Holm, who has worked for Merrill Lynch Investment Managers, Bank of America and Citigroup, among other financial institutions.
However, all the bank’s deposits will be based in the VI.
This, said Mr. Holm, will help change the territory from a place where “money just moves from point A to point B and happens to touch” to a financial centre where “real deposits stick on the island.”
The financial advisor also said the bank may help reverse the trend of declining incorporation rates in the VI, where new company incorporations have decreased by about two percent annually over the last five years.
“Instead of a Russian going to Cyprus or an Indian going to Mauritius, they’ll hopefully say, ‘Since there’s a bank in the BVI, we might as well incorporate in the BVI,’” he said.
Besides obtaining a licence from the FSC, Mr. Holm said that the bank needs to finish building its digital infrastructure, hire additional staff, and raise the rest of the $150 million target equity base before it can become fully operational.
Once those goals are completed, it would carry out the typical functions of a traditional bank, with the only difference being that all of its clients will be incorporated business companies, Mr. Holm said.
“[The bank] will be focused on high-net-worth Chinese investors initially,” he added. “That will expand over time, but is our focus on day one.”
The FSC did not respond to inquiries.
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