First St. Vincent Bank, FSVB, has been closed, after a Receiver was appointed for the Bank by the Eastern Caribbean Central Bank (ECCB).
A release from the ECCB said the action was taken with effect from Friday May 26th, in exercise of the powers conferred under Section 138 of the Banking Act No 4 of 2015 of the laws of Saint Vincent and the Grenadines.
The release said First St. Vincent Bank has been providing banking services to the people of Saint Vincent and Grenadines since 1909. As at 31 March 2023, the Bank reported $46.8 million in total assets, which accounted for 1.6 per cent of the total banking assets in Saint Vincent and the Grenadines.
The ECCB said, as a regulator of banking business in the Eastern Caribbean Currency Union, it has been monitoring the operations of FSVB closely for the past eight years, including daily ongoing off-site surveillance;, and most recently, on-site examination over the period 15 – 26 May 2023.
According to the ECCB, those examinations revealed significant and sustained breaches of the Banking Act, 2015, especially in respect of capital requirements; high credit risk and low earnings performance; poor accounting and corporate governance practices; and ineffective risk management systems.
The ECCB said it granted the board and management of FSVB time and opportunity to address the identified breaches and mitigate against the continued erosion of capital to place the institution on a sustainable path and become compliant with the Banking Act, 2015.
The ECCB said, in keeping with its mandate to protect the interest of depositors and creditors of FSVB, it has implemented a two-phase resolution strategy for FSVB, in consultation with the Government of Saint Vincent and the Grenadines
Phase I – The ECCB has appointed David Collins of Interpath East Caribbean Ltd (trading as Interpath Advisory), as Receiver to assume control of, and secure the assets of,
First St Vincent Bank Ltd for an initial period of six months. The Receiver will liquidate the institution via the sale of viable assets and wind up its affairs in an orderly manner to minimise risk to financial stability.
Phase II – A Purchase and Assumption Agreement will be executed with Bank of St Vincent and the Grenadines (BoSVG) effective 1 June 2023, to acquire certain assets and assume certain liabilities of FSVB. The remaining assets and liabilities will remain in the Receivership for liquidation.
As a result, First St. Vincent Bank has been closed with effect from Friday May 26, and Depositors’ accounts valued up to the sum of $100,000 will be transferred to BoSVG.
For accounts valued over $100,000, the sum of $100,000 will be transferred to BoSVG and the balance (exceeding $100,000) will remain in the Receivership
Depositors with balances up to $100,000 will have full access to their funds from 1 June 2023 at BoSVG’s Card Distribution Centre, 1st Floor, Halifax Street Branch.
Photo by: First St. Vincent Bank
