(PLTM) - Customers of the National Bank of the Virgin Islands (NBVI) and the public are being assured that the bank's position is stable and sound.
The Board of Directors and Senior Management Team of the NBVI issued a statement on Friday, October 28, 2016 in response to media articles which made reference to the bank’s non-performing loan portfolio and excerpts from regulatory correspondence.
"We wish to assure all customers and the general public that the Bank’s position is stable and sound. Further, the Bank is well capitalized and operates with adequate levels of liquidity. The recent media statements are not reflective of the Bank’s current position or its strategic direction," the bank said.
The statement continued, "Finally, we thank our loyal customer base for its continued patronage as we remain open for business and make positive strides in compliance with industry best practice and regulatory standards."
Previous Article Published October 28 - We Don't Foresee Failure In Banking Sector - FSC
Ongoing damage control continued on Friday afternoon, October 28, over the recent revelations that the Financial Services Commission (FSC) had expressed major concerns over the survivability of the government-owned National Bank of the Virgin Islands (NBVI).
The FSC, which is the regulator for banks, issued a statement where it did not specifically point out the NBVI, but indicated that all licensed banks in the BVI are well-capitalized. The commission also said that they do not foresee any failure in the banking sector.
"While we are unable to comment on the financial condition of any individual financial institution operating in the BVI, the FSC can confirm that BVI licensed banks are well capitalised and operate with adequate levels of liquidity which are good indicators of their strength," the FSC stated.
"We do not foresee any failure in the BVI banking sector, and continue to be actively engaged with all relevant stakeholders."
The commission stated that as the BVI's sole financial regulator, the FSC is committed to the effective supervision of all BVI licensed financial institutions.
"We are confident in our regulatory procedures and processes. When we identify matters of concern we routinely engage the financial institution to satisfactorily resolve them," it stated, adding, "Our ongoing supervision efforts have always included actively working with management teams and shareholders of financial institutions to assist with a pragmatic approach to achieving satisfactory compliance."
As reported on Thursday, October 27 by BVI Platinum News, major concerns were raised by the FSC over the functioning of the NBVI, so much so that the commission has questioned, among many other actions, whether the bank should be sold.
In a letter sent to Financial Secretary Mr. Neil Smith by Deputy Managing Director, Mr. Kenneth B. Baker, at FSC, the main issue stemmed from the Non-Performing Loan Portfolio (NPL) at the bank.
According to information, in the letter sent earlier this year, the FSC stated that it has been monitoring the Non-Performing Loan Portfolio of the National Bank of the Virgin Islands, which when expressed as a ratio (non-performing loans/total capital), is in excess of 100 percent of total capital. Furthermore, the non-performing loans as a percentage of total loans is currently in excess of 20 percent.
"The BVI banking sector has historically averaged around 3 percent, so clearly, the bank is well in excess of the historical average," the regulator (FSC) said about the bank, whose shareholder is the government.
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