An interesting position. We refer to the comments by National Insurance Scheme (NIS) chairman Dr Justin Robinson, as it relates to the share purchase offer of Republic Bank of Trinidad and Tobago for the outstanding shares in the local operation of that bank.
This issue of Republic Bank (Barbados) Limited, formerly Barbados National Bank (BNB), being totally foreign-owned has aroused emotional response. Since the privatization of the BNB in 2003 when Republic Bank became the majority shareholder, there has been much discussion on the merits or demerits of it all.
There have been mixed views from Joe Public, as well as the experts and academics expounding in the Press. Senior research fellow of the University of the West Indies (UWI), Dr Don Marshall, has argued that rather than sell, Government and the NIS “should be putting in a bid to take over Republic Bank for developmental purposes”.
On the other hand, Dr Marshall’s UWI colleague economist Professor Michael Howard has proposed all shareholders ought to sell to Republic Bank and not be guided by “nationalistic or jingoistic considerations”.
Even though Republic Bank is a successful and well managed regional financial institution, for some Barbadians it is a “foreign operation” and they do not see any link either through the Caribbean Community or the CARICOM Single Market and Economy.
The proposed sale of the shares seems rather straightforward. Republic Bank wants to have 100 per cent ownership. This means acquiring the 18 per cent plus shares that Government owns and the ten per cent of the NIS, forcing the other small shareholders to fall in line.
We appreciate that Government may very well be considering the foreign currency it could earn from such a sale – just over US$43 million. However, if it must sell, the state should seriously not do so for less than the market value, of which the offer is already 50 cents below. A higher price ought to have been requested for the shares, given the demand, and based on comments from top executives within the bank about how key the Barbados operations are to its success.
That is why we support the idea floated by the NIS board chairman that it be given a stake in the Republic Bank group with its headquarters in Port of Spain. Our National Insurance Scheme is not cash-strapped and needs to have sound investment opportunities – of which this would be a good one, based on the parent company’s performance.
It is a suggestion worthy of serious consideration. It should occupy the attention of the directors of both the NIS board and the Republic Bank, as well as the Ministry of Finance. We may need to get past both the sentimental factor and the trust issue. We must ensure added value for our National Insurance Scheme.
