The Eastern Caribbean Central Bank (ECCB) has appointed a Receiver for First St Vincent Bank Ltd (FSVB) with effect 26 May 2023.

FSVB has been providing banking services to the people of Saint Vincent and Grenadines since 1909 and according to reports, as of 31 March 2023, FSVB reported $46.8 million in total assets, which accounted for 1.6 percent of the total banking in Saint Vincent and the Grenadines.

“As the regulator of banking business in the Eastern Caribbean Currency Union (ECCU), the ECCB said it has been monitoring the operations of FSVB closely for the past eight (8) years, including daily ongoing off-site surveillance; on-site examination in 2018, Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) examination in 2019, and most recently, on-site examination over the period 15 – 26 May 2023. 

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 foregoing deficiencies posed a serious threat to the depositors of FSVB and the future viability of the institution. Notwithstanding the issues identified, the ECCB 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,” according to the ECCB

During this period of forbearance, the ECCB also asked the bank to restrict on lending to only cash secured facilities on 9 April 2018 (to protect depositors); and restrict on the payment of emoluments and other benefits, including board fees on 12 December 2018 (to protect liquidity and reduce capital erosion)

“In keeping with its mandate to protect the interest of depositors and creditors of FSVB, the ECCB, in consultation with the Government of Saint Vincent and the Grenadines, has implemented a two-phase resolution strategy for FSVB,” the statement explained

The first phase is the appointment David Collins of Interpath East Caribbean Ltd  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”

And the second is the 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. 

The bank was officially closed yesterday