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Serious concerns raised by FSC about survival of NBVI!

- area of concern is that of Non-Performing Loan Portfolio
The National Bank of the Virgin Islands (NBVI) has come under fire for the last few years from the Financial Services Commission (FSC). Photo: VINO/File
From left: Deputy Managing Director of BVI FSC, Kenneth B. Baker; Chief Executive Officer of the National Bank of the Virgin Islands, Joy N. Francis and Financial Secretary Neil M. Smith. Photo: Internet Source/Hezekiah Maddox/VINO
From left: Deputy Managing Director of BVI FSC, Kenneth B. Baker; Chief Executive Officer of the National Bank of the Virgin Islands, Joy N. Francis and Financial Secretary Neil M. Smith. Photo: Internet Source/Hezekiah Maddox/VINO
ROAD TOWN, Tortola, VI- The National Bank of the Virgin Islands (NBVI), which has the Government as its only shareholder, continues to be an institution of concern by the Financial Services Commission (FSC), the state regulator of Banks and the Financial Services industry.

The the state-owned financial institution, has come under fire for the last few years from the FSC.

In one of many letters written to the bank from the FSC, serious concerns were raised about the Non-Performing Loan Portfolio (NPL) earlier this year.

Red flag on loans

In one letter, the FSC said, “the Financial Services Commission has been monitoring the NPL of the Bank, which when expressed as a ratio (non-performing loans/total capital), is in excess of 100% of total capital. Furthermore, the non-performing loans is currently in excess of 20%. The BVI banking sector has historically averaged around 3%, so clearly, the Bank is well in excess of the historical average.”

The FSC urged the bank to address the matters with some priority and also gave some stern recommendations as to how the matters will be addressed by the Regulators.

They include, A. Asking the Bank to voluntarily suspend the granting of new loans until the NPL is reduced, B. The FSC could take enforcement action and prohibit the Bank from granting new loans, C. The FSC could allow the Shareholder to voluntarily transfer the non-performing loans to a special purpose vehicle to be managed separately from the Bank.

Close the bank?

Among the other recommendations that could be imposed by the FSC on the NBVI, according to the Letter from the Regulators, is that the FSC “could take enforcement action to suspend or revoke the Bank’s licence because the Bank is likely to pose significant regulatory risk to the banking system and the Bank may not be operating in the public’s interest,” Mr Kenneth B. Baker, the Deputy Managing Director, wrote.

One of the correspondences to the Financial Secretary Neil M. Smith about the state-owned National Bank of the Virgin Islands warned that “the current trend of increasing non-performing loans is clearly unsustainable from a business and supervisory perspective. The non-performing loans have now reached a level which requires supervisory intervention”.

The FSC lectured the NBVI that steps will be taken because the Commission has several obligations in accordance with the provision of the FSC Act and international standards.

Over the past five years the NBVI has been ripe with allegations and reports about internal staff issues, loan repayments and selective decisions on who is taken to court over owing the bank.

55 Responses to “Serious concerns raised by FSC about survival of NBVI!”

  • one eye (27/10/2016, 12:16) Like (42) Dislike (1) Reply
    Lord vino u hot this week
  • Crazy! (27/10/2016, 12:22) Like (22) Dislike (3) Reply
    Well - I suspect it is the same Government that puts pressure on bank officials to give loans to people that no sane institution would. So to blame the National Bank personnel is very unfair - I am almost certain that they have these loans forced down their throat. In turn those that should never have been given the loans feel no necessity to pay on them because those same Government officials won't allow the bank to take action for the defaults! The poor bank is in a no win situation and a lot of very good people work there!!
    • Bad management. (27/10/2016, 13:05) Like (26) Dislike (5) Reply
      This is nothing more to do with bias and unprofessional staff. That was my bank. I wanted a 7 thousand dollars loan to buy a vehicle. This was some 12 yrs ago. They turned me down. Never could understand why up to this day 12 yrs later I can't understand why. I ve gotten my loan from Scotia. So I just took my money and close my account. Since then I've gotten about 3 Vehicle loans. Never in default.. Bad management will kill any business.. It's all about bad management. I was told it's managers decision. I always thought it was personal.
    • Smile (28/10/2016, 11:08) Like (3) Dislike (1) Reply
      The National Bank has its fair share of problems just like any other bank, that's for sure but I don't think the full story has been told.

      1 - The FSC letter was written earlier in the year. It would be good to know what action the bank and the government has taken since then. For a matter of this importance, there must have been further correspondence. Did the whistleblower have access to these and if so, did he/she/they share with the media?

      We can't judge the fate of the bank on just one letter. If the bank was still at the point of failure subsequent to the letter, the FSC would have closed it by now.

      2. The NPL portfolio is at 20% for the NBVI compared to 3% to the commercial banks but those banks have much larger portfolios (several times greater) comprising of a fair amount of big loans to manage whereas the NBVI would have a few large loans and several smaller loans.

      A few delinquencies on the large loans ($4 - $5m range) on a portfolio of $100+m for NBVI (I think that is the figure that the NBVI used when it published its last accounts in the newspapers), will easily take NPL to $20+m (or 20%).

      Is it that a few bad apples have spoiled the whole bunch and once they have been addressed, that NPL falls within industry standards?

      We anxiously await the answers.
  • chad (27/10/2016, 12:22) Like (40) Dislike (2) Reply
    They can also address those ridiculous salaries the senior persons at the bank are getting despite the poor performance. Time longer than twine they say.
    • $ (27/10/2016, 13:45) Like (28) Dislike (1) Reply
      For real! Who gets paid over $200K a year to mismanage a bank. Something is terribly wrong here.
  • long look me come from (27/10/2016, 12:24) Like (24) Dislike (2) Reply
    this is thing to talk let me go get me little money and keep under my pillow
  • ? (27/10/2016, 12:57) Like (20) Dislike (8) Reply
    What is a non performing loan?
    • Honorary Citizen (27/10/2016, 14:07) Like (11) Dislike (0) Reply
      A nonperforming loan is the sum of borrowed money upon which the debtor has not made his scheduled payments for at least 90 days. A nonperforming loan is either in default or close to being in default.
      • ? Honorable Citzen. (27/10/2016, 19:20) Like (4) Dislike (0) Reply
        Thanks for explaining. I didn't know what a none performing loan was...That's clearly a management...mis management r non management issue.. Don't they have debt collectors. ?
    • finance major (27/10/2016, 14:32) Like (8) Dislike (0) Reply
      A loan is non performing when payment is past due after a certain amount of days, usually 90. (Literally learned this in my banking class on Monday lol)
  • shut it down (27/10/2016, 12:57) Like (7) Dislike (21) Reply
    Hope the FSC close it down!
    • Waitman (28/10/2016, 09:42) Like (3) Dislike (1) Reply
      All sorts of business go through difficult times, but our crab-in-bucket mentality people, always quick for the worst. Give the people a chance to regulate themselves. If they were a tan-coloured bank, the negatives wouldn't be spewing like this.
  • Me (27/10/2016, 13:06) Like (5) Dislike (0) Reply
    wow red flags is joke!!!!!!!
  • eh (27/10/2016, 13:10) Like (8) Dislike (0) Reply
    Representative from the 1st was saying the same thing, is now many will believe
  • crush (27/10/2016, 13:17) Like (3) Dislike (6) Reply
    I miss the slim female teller with the belly
  • wize up (27/10/2016, 13:30) Like (9) Dislike (0) Reply
    how can we allow any government in this territory to suppress the media...reading this item is cause for concern(was just to dump some money in that bank)...without the media stuff will just slip by some of us because some of us well know what going on
  • Jack K (27/10/2016, 13:38) Like (13) Dislike (0) Reply
    nah worry, just tell them to get a line of credit from CIBC, that should clear up any short term daily financing needs that may occasionally arise
  • Lb (27/10/2016, 13:46) Like (10) Dislike (9) Reply
    So the one bank that is supposed to look out for us, is now being forced to operate like the other banks and squeeze the locals, sell their property, exploit whatever collateral is put up, etc. Yes the locals need to pay their loans but we need help.
    • wow (27/10/2016, 15:01) Like (18) Dislike (1) Reply

      LB you sound like an "$$. The bank is there to help but within reason, not to just give away people's hard earned money willy nilly just because the people who want it are local.

    • @Lb (27/10/2016, 15:31) Like (5) Dislike (1) Reply
      Tis folk like you have the local bank is a mess. BTW I hope that the former rep of the 8th know he has to give account
  • @ Eh (27/10/2016, 13:49) Like (14) Dislike (2) Reply
    Stop the noise! The rep for the 1st wants ALL Commercial Banks to do the same shit that NBVI is now in trouble for. NBVI is in trouble because they gave big loans to persons/businesses that clearly demonstrated the ability to spend the money but not the ability to pay it back. Fahie is always on record crying about why the banks taking homes and why they don't just give people money when they ask for it. Well, the other banks do not want to end up like NBVI which is why they have their rules. The point is yes some banks are full of shit but for the most part, people need to take their responsibilities seriously and since some feel NBVI is an arm of Government especially when their party is in power, what can you do? Government owns the bank so they basically run the show indirectly. The next set of information should be who those big non-performers are, your mouth will drop when the names are let out the bag.
  • Welsa (27/10/2016, 14:14) Like (22) Dislike (2) Reply
    What about all those unsecured loans given to Investment Club members and Government cronies under the previous CEO?
    • Yes (27/10/2016, 21:29) Like (1) Dislike (1) Reply
      Isn't that why Lloyd had to go "walkies" from the Bank a couple years ago?
  • @ welsa (27/10/2016, 15:01) Like (3) Dislike (2) Reply
    ting te talk. who u think non performing.
  • trrefdrfds (27/10/2016, 15:14) Like (13) Dislike (0) Reply
    should I worry and take me little money and run from this bank
    • YOU (27/10/2016, 18:25) Like (7) Dislike (0) Reply
      You can question; I will act. If the regulator has such concerns so do I. Their job is to protect the public. I trust them I will be at the bank first thing tomorrow. If they have that much money they cannot collect, somebody will loose their savings. After all the money we deposit is the money they loan. The bank does not make money/ I will make sure it is not my money.
    • @ truth (27/10/2016, 18:43) Like (0) Dislike (0) Reply
      Yessie
  • A Pass Employee (27/10/2016, 16:02) Like (4) Dislike (0) Reply
    I wish dem all the best. lol
  • voter (27/10/2016, 16:45) Like (3) Dislike (1) Reply
    I told u so
  • OMG! (27/10/2016, 17:28) Like (9) Dislike (0) Reply
    a bank run seems imminent
  • ANOTHER NDP FAILURE (27/10/2016, 17:29) Like (26) Dislike (5) Reply
    THIS HAPPENS WHEN YO PUT GIRL FRIENDS OF POLITICIANS AND FORMER CANDIDATES TO DO JOB THAT THEY CANT DO
    • Blowing smoke (28/10/2016, 01:07) Like (6) Dislike (5) Reply
      In defense of the girlfriend you are seemingly bashing that lady is more than qualified. I'm no friend, I even applied to the bank for an opening I very well was qualified for but didn't even get an interview instead was told I was unsucessful.

      I say all of that to say our system is rigged. We do have qualified people at the helm but for some reason their hands are always tied by some higher power. Give jack his jacket the boss is qualified sometimes we are recruited to clean up someone else's mess and in the process our good name gets tarnished. Sorry to say the people in Tola who act elite downing in debt, bad payers and airheadish. That's the raw reality.

      Keep your keep up girlfriend you're past performance at the other entity was never questioned take this as a lesson learned. People always going to talk but until they walk in someone else's shoes they'll never know the real deal.
  • Funny (27/10/2016, 18:14) Like (8) Dislike (8) Reply
    Funny FSC won't touch Scotiabank. That's really cute. Maybe the US or UK military should take care of Scotia...
    Who needs Toronto anyway?
  • Hmm (27/10/2016, 18:15) Like (10) Dislike (2) Reply
    This bank is mess. Giving loans of people's hard earned money and not making sure it is repaid. The is dangerous. People need to take off what funds are left before they loose it all. Th previous and present management clearly do not know what they are doing! The Board is clearly not doing their job. This is not fair to the public who entrust them with their savings. I am removing my money from these incompetent people. They do not deserve my trust. This is no joke! These are hard times.
  • Foolish bank. (27/10/2016, 19:26) Like (11) Dislike (1) Reply
    My living girl friend working for $900 a month. I'm working for $2,600 a month. The bank turn me down for a six thousand dollars loan. I ask my girl friend to try and she got the loan. Hahahaha. I am the one that paid it back because it was for me...Can't get crazier than that.
    • Banker (28/10/2016, 06:33) Like (3) Dislike (4) Reply
      It would have been helpful to the readers and fair to the loan officer who turned down your application if you were to disclose your monthly financial commitments and that of your friend. I imagine your friend had a larger savings balance proving her ability to repay.
  • The TRUTH (27/10/2016, 19:57) Like (3) Dislike (0) Reply
    LOL all I got to say.
  • bojan (27/10/2016, 19:59) Like (2) Dislike (0) Reply
    Well here we go the wind blowing hard now there goes the Chicken botton what a thing 2 smart got out smart by 1 smart. Pressure
  • NHI (28/10/2016, 00:07) Like (6) Dislike (0) Reply
    Wow i sèe people removing their money now after this heasline the ting done for
  • Z (28/10/2016, 00:45) Like (2) Dislike (0) Reply
    son of the soil whats your comment on this 1?
  • Sawda (28/10/2016, 03:28) Like (3) Dislike (1) Reply
    The past 5 years, who is in power for the past 5 years wow, this government got to go,given big loans to their cronies bankrupt the poor bank sad..
    • @Swanda (28/10/2016, 09:49) Like (3) Dislike (0) Reply
      it may say for the past five years but a large if not 3/4 of these loans were issued to the VIP cronies and families under the VIP government. This bank spent more time under VIP than NDP. It has been in place for more tham 40 years just like the VIP why do you think the old management was removed and replaced. This crap management needs to be removed and replaced as well.
      • VG Realist (28/10/2016, 11:27) Like (1) Dislike (0) Reply
        Stop the blame game and the party politics. The Territory is spiraling out of control and UK intervention is sooner than we think. Is people like you is why the BVI is the way it is crab in a barrel mentality. Sick of you damn people.
  • Me (28/10/2016, 06:47) Like (1) Dislike (0) Reply
    Like I gotta take out my money today. Have some CD's in there and I need to make sure my money in my hand or FSC will have to pay me.
  • ? (28/10/2016, 07:29) Like (6) Dislike (0) Reply
    Am I the only person feeling that things are spiralling dangerously out of control and the people we elected to represent us are noticeably silent? What on earth is going on?
  • Notmymoney (28/10/2016, 08:49) Like (6) Dislike (0) Reply
    Why this National Dumb Party always trying to cover up the media. How did Platinum news done report that these incredible matters at the NBVI done address? We look like jackasses?
  • hmmmmmm (28/10/2016, 09:06) Like (1) Dislike (0) Reply
    The investment club wants to buy this bank for the longest while. Guest that is what will happen now.
  • Unemployed (28/10/2016, 09:21) Like (3) Dislike (0) Reply
    Qualification alone can't help in these times mehson. Just wuk a lil ting out see how fast you get a good job. Baker got he goose cook now for doing he job. I'll be applying for his job I need wuk too. I not telling the truth I plan to keep my job. Wha you bawling fah?
  • @unemployed (28/10/2016, 18:57) Like (1) Dislike (0) Reply
    Sorry Bakers's Job is now secure. He has already fixed that. The new position is that the banking sector is in good shape lol go figure.


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