BOSL suffers rise in bad loans; gov’t to remain shareholder

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BOSL suffers rise in bad loans; gov’t to remain shareholder
The ECFH/Bank of Saint Lucia building.
The ECFH/Bank of Saint Lucia building.
The ECFH/Bank of Saint Lucia building.

The Bank of Saint Lucia (BOSL) is now shouldering the burden of a hefty $300 million dollars in bad loans.

However, the Government of St. Lucia has assured the general public that it is their responsibility to keep the bank buoyant.

Minister with in the Finance Ministry Dr. Ubaldus Raymond said the issue requires urgent attention.

The Senator said the government is currently exploring options in dealing with this issue so as to bring some normalcy to it.

“We are aware that there are many depositors at the bank and we want to ensure that depositors’ money is safe and the government is doing its best in ensuring that this is done,” he told the media.

Dr. Raymond has also put to rest rumours that have been circulating about BOSL being sold, explaining that there is no truth to it.

The government, he said, will remain a shareholder of the bank.

(13)(1)

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43 COMMENTS

  1. Putting unqualified family and friends in jobs instead of people who are qualified is the result of what you see in Saint Lucia today. Blame yourselves not the young people because they are living in the mess you adults created-most of you have seniority and not experience since you've worked the same old job for years and may now find yourselves on the bread line

    (1)(0)

  2. Government please put a hand advice the bank to cut overhead .First step.non performing loan due to the economy and loan policy that is no in keep with what going on around us.as banker you eye and eyes must be open at all times.banker give loan and turn their back , they need to follow up on customer on a daily base.
    But I must say it a lesson to learn financial institutions need to make sure that they step up and know what is going on in the economy , know what government policies are and stay out of politics.

    (1)(3)

  3. My bank o my god.we need to restructure I heard one manager getting 50000 month and the bank is doing so badly.cut expenses first because in this economy collection of loans is a no no.no jobs no money.

    (2)(2)

  4. I agree with the Grambling students who are not paying the loans back! What do you expect from visionless governments? Students come back qualified, but there are no jobs for them and they have to work for what they can get! Sometimes their salary hardly covers the loan repayments. If you are going to make the ones here pay, then make all pay....look for those who stayed behind in the US and are working and make them pay as well. This happened because Government upon Government upon Government have not been able to deal with the issue of jobs in this country! There are NO incentives whatsoever to even help persons who attempt to be self employed! Every student loan that is approved is not done so if it is not on the Manpower Training list distributed by Government. Therefore the Government is saying that we need persons qualified in these areas, so go out there, get qualified because we need you. You come back and there are no jobs! STUDENTS should start taking Governments to task for their lack of vision and for them getting into debt!

    (7)(4)

    • I don't agree with persons not repaying their loans however BOSL did run a fast one on these Grambling students $1500 monthly for 15 years. Smh. Instead of trying to make such a huge profit the bank should have agreed to a more realistic affordable interest rate. Maybe more of the students would have returned home. That repayment is more than my mortgage. For $150,000 minus about $25,000 in bank fees the students must payback over $200,000, from salaries of $2500 and less. When will people learn greed gets us no where. Smh. Hope the bank realizes that their efforts should be focused on trying to find out how to get their money back from those students who stayed back to work overseas cuz those here are making pennies and trying to pay back from the little they make

      (10)(0)

      • Was just doing the Maths, $1500 monthly for 15 years now that's just crazy. These banks are only out to make maximum profit always. Ridiculous. I hope now the goverment intervens cuz that is a real reapoff.

        (4)(0)

  5. To those who are thinking about it. There is no way that we should invest our tax payers money into another LIAT. Although our monies is still involved. I say sell our shares and invest it in the development bank. At least we know when we loose a St. Lucian business or person benefits, End Of Story.

    (0)(1)

  6. The government, past and present, is synonymous with those failed banks. All are making bad deals : Black Bay, CIP, Green Burg............,pearl of the Caribbean which is actually a Casino of the Caribbean.

    (4)(1)

  7. I remember when ECFH last offered shares in the year 2007 at around $12 per share. This was right before the crash in 2008, guess what those shares are worth now $5.15. Well looks like this was a mechanism to protect these thieves from their mistakes. If you tell me that the crash happened in the US think again, all banks issue loans to people and companies who have no way to pay it back. Risky business you say.

    (6)(0)

    • I agree with you dude. I posted a comment of a businessman who squandered $26,000,000.00 of the bank's funds, unprotected bad loans. Today it's no even two years since, he is now back in business and walks the streets like nothing has happened.

      (9)(0)

      • Simple. He has limited liability. He has a limited liability company. Like governments, you can waste OPM, other people's money, if you know how.

        (0)(0)

  8. the shareholders endorse the board of the business. If they not voting against them let the shareholders loose the investment.

    (6)(0)

  9. SORRY TO SAY WHATEVER DR RAYMOND SAYS ...Should be taken with a grain of salt i have never fully believed anything he says...JUST DO NOT TRUST THOSE WHO SWING FROM ONE PARTY TO THE OTHER JUST TO STAY IN POWER...SORRY Dr UBALDUS THAT IS HOW I SEE IT...

    (11)(10)

    • What you have just said up there does not make any damn sense at all. We are talking banking banking, loans and solvency. What the hell does moving from one party to another have to do with that moron? Where, other than in your tribal pea-brain does any of this fit into party politics?

      The options open to government are either to infuse more capital into the bank, restructure the bank, sharpen its collections department if it has one, restructure and/or write off a large percentage of the non-performing loans, then restrict in the future some loan categories, or some combination of the above.

      For the benefit of injecting greater confidence into the banking system, it is duty of the ECCB to create a real credible depositor insurance mechanism to protect savings deposits up to certain dollar limits per savings account.

      Banks with development banking components are always weighed down, with carrying on their books, from time to time, huge inventories of highly non-performing loans. Sadly, the suspect SLP sympathizer here does not recognize that the bank's portfolio may well be suffering from the after effects of the financial collapse of the last SLP administration.

      Loans extended to clients who are business failures under the economic collapse of no-growth or non-growth of SLP-STEP economic thinking may never be able to repay their debt obligations.

      (19)(9)

        • Where are the activist shareholders? Our secondary schools and universities are failing us miserably. Where is the corporate governance education that this issue shows a crying need for?

          (4)(0)

      • The ECCB is one of the most useless central banks on this side of the globe. ECCB needs to realize that they cannot afford to sit back as an observer anymore. They need to take a more active role.

        When this whole toxic assets issue showed up they made a big show of passing legislation to facilitate the creation of an asset management organization which would work to take these bad loans off the bank's books. The idea was the Asset management firm would be run by experts in dealing with collateralized toxic assets, who would efficiently deal with the issue. Years later, not even the legislation has been passed!

        The ECCU banks have been losing correspondent banking relationships. WHY DO I NEED TO SEND MONEY THROUGH THE US TO PAY A CONTRACTOR IN GRENADA!?! WHY ECCB?! Is it that hard to set a payments system between the islands??

        I telling you gassoh! ECCB is a damn waste of time!

        (9)(1)

    • For your information Ubaldus did not swing from one party to another to stay in power. He left SLP while they were still in office. Remember SLPs rejected him because he told them they should do away with welfare programs like STEP cause it would ruin the economy even further?

      Anyways the SLP thought that it would guarantee them re-election by consolidating welfare to their supporters. Guess what happen next? Same thing Ubaldus said, three consecutive years of negative growth, high VAT, banks reducing interest on deposits even while increasing fees were still in the RED. You have BOSL now, deal with that.

      (8)(7)

    • I would NEVER expose my ignorance for the world to see.

      It is ok if you don't know about a subject, to just keep quiet or ask just ask a question.

      But you have succeeded in displaying blatant ignorance at its highest.

      And to make it worse you have "Tru Lucian" as your name.

      SNO delete that comment because people might think differently of St.Lucians

      (3)(1)

  10. Are Grambling State university students responsible for the $300 million in debt..are they the only students that tooks loans to study, do they make up for bad debt collected, bad investments also by the bank local and international..that person that made that comment needs to shut up and get their facts right..Investment is a risk, banks take it, individuals take it, companies take it, so do your studies before we educate you more on financials.

    (8)(10)

    • The poster said the the Grambling loans CONTRIBUTED to the 300 million. You are twisting his words while talking about facts. You think too highly of yourself. Idiot.
      Your simplistic assessment of how banks manage thier risk also shows you haven't the slightest idea of how caribbean banking works or how the very reason for our indigenous banks coming into existence is the same reason the majority are failing.
      These indigenous banks operate as "the poor mans" bank. Which is why from from inception they had a higher risk appetite than the Canadian counter parts. Back in the day this was fine as the poor man back then would starve but he would pay his debt. Our generation of degenerates however have little financial responsibility so the concept of a poor mans bank which operates to a large degree on good faith is doomed to fail.
      The indeginous banks in the region must amalgamate and revise thier business models if they must survive.

      (11)(3)

  11. I have shares in ECFH the parent company of that bank. Instead of sending me dividends they send magazines and letters of meeting they had with board members.

    Board members are paid for each meeting they attend plus other payments. And the board members are
    the board members of business.

    A bunch of useless people, waste of money.

    (16)(0)

    • Members of the public are duty bound to take care of their own interest. If they do not do their due diligence, no one will do it for each one of them. If you are a financial dummy, you will get burned. You pay the cost of being ignorant. I never saw a prospectus from that banking group. I do not know that we have a financial regulation body that guards and protects, guards and protect the interest of the investing public. This harks back to the CLICO fiasco. Little wonder some of the low-information processing members of the public are duped. The $12/share demand was much too high in our neck of the woods.

      A corporation is not duty bound, through its board of directors, to declare dividends. Being on the board of another company is neither necessary nor sufficient to be a board member of a financial intermediary. However, one would have expected that holding on to the stock as an investment would have realized a price appreciation. Getting a value of about 50% of the purchasing price means that purchasers saw their investments ending in a destruction of capital. An active secondary market is critical for a more vibrant investment community.

      (4)(0)

  12. It would be very interesting to find out who the reciepiants of these bad loans are. You can bet your bottom dollar it won't be St.Lucians. Account holders should immediately start withdrawing their funds from the bank before the S.... Hits the fan. No one in their right mind will believe the words of the Bush Doctor..Letrs start supporting our penny bank and our credit unions. NOW IS THE TIME TO ACT.
    G.J

    (17)(11)

    • After joining Farmers Credit Union i have never regretted. They are the best.!! the banks are too dramatic. I only deal with 1st National on a basis whereby its easy for my daughter overseas to have use of her debit card through our account here. But the Credit Union is first option.

      (4)(0)