PARAMARIBO – Suriname’s Hakrinbank and Landbouwbank are to be privatized before the end of this year. The government will sell its shares on the Suriname Stock Exchange, and private Surinamese investors are preferred, the Central Bank of Suriname and the Finance Ministry announced yesterday.
It seems the government effectively shelves the takeover of Hakrinbank by the Republic Bank of Trinidad. Talks between the two banks were at an advanced stage, with Republic Bank willing to buy the State’s shares. A source involved in these talks claims negotiations were conducted in consultation with the Central Bank.
Hakrinbank director Jim Bousaid told de Ware Tijd he was surprised by the news yesterday, and refused to give a reaction as yet.
Landbouwbank director Djaienti Hindori welcomes the move, and says she expects her bank to be able to speed up a professionalization process. Hindori will ask the government to partially or complete pour proceeds of the sale into the banks reserves, she said.
The State is sole owner of the Landbouwbank and owns 51% of the Hakrinbank’s shares. The banks’ financial position is to be scrutinized, the financial authorities say in their statement. After that, the sale price of the shares and the manner in which they are to be sold will be determined.
The statement also claims the privatization is intended to encourage Surinamese to invest and to increase competition in the banking sector, while the rights of the banks’ staff will be respected and protected. With the proceeds of the sale, the government wants to pay debts and “invest in the social sector.”
De Central Bank refused to elaborate, with a spokesman saying only, “The process has started, and that’s all we have to say.” Finance Minister Adelien Wijnerman did not react to repeated requests for comment.
Legislator Ruth Wijdenbosch (NPS) believes the government must present its plans to Parliament first, as the shares are not the cabinet’s, but the people’s. “If the government is considering privatization, it must get permission from Parliament first.” Wijdenbosch reminds that the Hakrinbank was privatized in the 1970s with “funds of the people” because it was on the verge of bankruptcy.
She doubts whether selling the shares to private domestic investors is the best option, preferring the Hakrinbank to link up with an international partner, so it can benefit from knowledge and access to the international market.
The Trade and Industry Association (VSB) applauds the fact that the State wants to give preference to Surinamese buyers, says chairman Ferdinand Welzijn, yet he warns the proceeds should not be used for “populist programs” including the increase of social benefits.