MSG085G/01E VENEZUELA-FINANCE: French Bank Postpones Sale of Provincial Stock
CARACAS, Nov 11 (IPS) - The Credit Lyonnais bank of France has decided to retain its 17.3 percent of Provincial, Venezuela's leading bank. Local financial experts claim that an attempted sale of the shares was unsuccessful.
When Credit Lyonnais showed 849 million dollars in losses in the first half of 1994, the French government - which owns 90 percent of the financial institution - instructed bank officials to sell off all international holdings.
Provincial President Jose Maria Noguerales said the French bank guaranteed him in October that Provincial stocks would be "the last to go," although he acknowledged that "the sale could take place eventually."
Venezuelan banking sector analysts claim that Credit Lyonnais tried to auction off its Provincial stock among brokerage firms in New York, but that lack of interest left the deal "cold."
They added that the package is unattractive because the owner would be entitled to one member on the bank's board of directors, but would have no influence, as decisions are controlled by the Polar Group, Venezuela's largest private group.
According to the analysts, the Polar Group is not interested in the Credit Lyonnais shares because, with over 30 percent of the stock, they already control the bank.
Thus, Credit Lyonnais was left trying to sell off its stock for far less than its real value.
For now, only 10.7 of Provincial stocks, owned by the state-run Grupo Confinanzas, are up for sale.
The state Deposit Insurance Fund, which holds the stock, has not explained how it plans to sell the package, but has indicated its desire to do so shortly.
Provincial became a "megabank" this year, as three of Venezuela's six leading financial institutions succumbed to financial crisis and more than half the country's banks were taken over by the state.
© Inter Press Service (2014) — All Rights Reserved. Original source: Inter Press Service