Former Director of Barbadian Financial Institution sees more profit possible: Tony Hoyos resigns from BNB Board & comments on proposed purchase of BNB shares by Republic Bank
Republic Bank of Trinidad has announced its intention to formally offer to purchase all of the shares of Barbados National Bank which it currently does not own. These shares represent approximately 35% of the BNB, with the Barbados Government owning 18%, National Insurance Scheme 10% and 7% owned by individuals and companies.
It is my understanding that the Government intends to accept this offer and that the Minister of Finance has the authority to require the NIS to accept also.
While I agree with the principle of the Government disposing of its shares in commercial enterprises I, however, disagree with the sale taking place at the present Stock Exchange price which is extremely depressed currently, due to the economic downturn which has negatively affected the prices of all shares quoted on the Exchange.
To agree to this low price is to say in effect that BNB’s best days are behind it and that there is no confidence in the organization to recover – I agree with neither of those assumptions. I believe that BNB’s earnings will rise again to their previous levels and beyond as the economic depression recedes. BNB has many strengths, including excellent market share, experienced staff, an extensive branch network and a new information technology system which will deliver improved customer service, all of which position it for a strong recovery as the economy itself recovers. As a director of BNB for the past 16 years I have witnessed the growth of BNB and I therefore speak with extensive first-hand knowledge of its development and potential.
I have therefore decided that I cannot sit idly by while the shares of BNB owned directly by over 1,500 minority shareholders or indirectly by the people of Barbados through the Government and NIS are sold at a distress price. I took legal advice on the propriety of making my personal opinion public while still a director of BNB and was advised against it. Therefore, with great regret, I resigned from the Board of Directors of BNB on Friday October 22. I recommend that BNB shareholders, including the Barbados Government and NIS, do not sell their shares in BNB at this time at the current market price of $5.57 or thereabouts. I personally would not be interested in a price of less than $7.20 per share.