Chavez Praises Banco de Venezuela Growth on the First Anniversary of its Nationalisation
Caracas, July 19, 2010 (venezuelanalysis.com)-- Venezuelan President Hugo Chavez declared the performance of the nationalized Banco de Venezuela unprecedented, one year after it passed formally into public hands.
At an event last Thursday to commemorate the first anniversary of the nationalization, Chavez proclaimed, “I don’t know if there has been any experience like it before in Venezuela of such growth. That means a lot of things. This throws out all of that information that is emitted from the laboratories of psychological warfare that global capitalism has set up in Venezuela … that manipulate and put fear in the minds of Venezuelans.”
He revealed an increase in deposits of 50.1% at the bank that make it the top performer in the country. “Today, the Bank of Venezuela is in first place out of all the banks in the country. When it was nationalized, and made the property of the nation, it was third place with Bs. 25.7 billion. Now it is in first place, with Bs. 38.6 billion in deposits.”
The loan profile of the bank to the productive sectors of the economy also increased in line with the government’s determination to ensure the Venezuelan financial sector works in the national interest.
Total loans made by Banco de Venezuela went up by 25.6% from Bs. 14.5 billion to Bs. 18.3 billion and manufacturing sector loans alone increased by 76.5% from Bs. 712.5 million to Bs. 1.3 billion.
Chavez also praised the doubling of loans to the housing sector. “The loan profile for housing was Bs. 582 million in June 2009, while at the end of June 2010 it reached Bs.1.2 billion, in other words, almost a 100% increase in credits for housing.”
Some Bs. 556 million were invested in other parts of the productive sectors of the economy and revenues that the bank made were valued at Bs. 400 million.
“This demonstrates a growth of 20% if you compare it with the revenues obtained during the first half-year of 2009, despite the fact that we cut interest rates by 40%,” said Chavez.
The government bought the Bank of Venezuela from Banco Santander on July 3, 2009 for just over $1 billion and managed to maintain all 7,500 workers in jobs throughout the nationalization process.
According to Chavez, the private company was initially reluctant to sell the bank. He said at the time that "there is something obscure here because its owners first were desperate to sell and now they are saying they do not want to sell it to the Venezuelan state. We are going to nationalize it so that it is put at the service of the Venezuelan people."
He also said that the bank’s resources righfully belonged to "the Venezuelan people and also the Venezuelan government."
"We need a bank of that size because this is the Banco de Venezuela. This bank generates massive profits but these profits are going abroad."
The government has since taken over a dozen banks, many for illegal transactions and others for failing to invest in the development of the country.