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Antigua weighs merger to save ABI bank

Published:Thursday | July 23, 2015 | 11:52 AM

The Antigua & Barbuda government said it is taking much longer than anticipated to resolve the issues confronting the financially strapped Antigua-Barbuda Investment Bank (ABIB).

"This is not an issue which is entirely in the hands of the government in the sense of the timing of the resolution," Prime Minister Gaston Browne said one month after giving the assurance that his administration was moving to have the issue settled by July.

The Eastern Caribbean Central Bank, assumed control of ABI Bank four years ago in July 2011 to save it from collapse. The ECCB Monetary Council said then that if the bank failed it could harm the sub-region's entire banking system.

"Presently, we have auditors who have been employed to do a final audit of the assets and the liabilities, of course, of ABI Bank so that when we transfer the good assets into the new bank, they will be a full and thorough accounting of those assets," said Browne.

"That is the process that is taking place at this time. We are told that it should be completed within 90 days, but we know how these things work. Sometimes they say 90 but it ends up to be 120, sometimes 180; but I am hopeful within the next 120 days that it will be resolved," he said.

Browne said plans for the bank include a potential merger with Eastern Caribbean Amalgamated Bank (ECAB).

"We're looking at the possibility of even consolidating ABIB with ECAB to make sure that we have a much larger and stronger bank. Legally, if all goes well with that consolidation, we will eventually end up with a bank that will have in excess of EC$1.1 billion," the prime minister said.

"We are also speaking with a potential investor who has committed to putting in between EC$80 million and EC$100 million in equity, which means that the new entity would emerge as one of the strongest banks in the OECS and would be positioned to take over other banks within the sub-region because it would now become a regionally competitive domestic bank. It will be one of the strongest banks to ever emerge in the history of this country," Browne added.