News Of Economy

Chavez threats to nationalise private banks

May 1, 2012

Venezuela’s President Hugo Chavez seems all set to nationalize the utility sector. Chavez not only brought the country out of the World Bank and IMF and nationalized CANTV, but also threatened to take over Venezuela’s private banks and its largest steelmaker, Ternium-Sidor, whose majority stakes are owned by Luxembourg-based form Ternium SA. However, Chavez said that they could avoid takeover if they adapted their businesses for national interest, as banks need to prioritize making domestic loans and the steelmaker should focus more on supplying the local market with cheap products. Venezuelan bankers are considering it as a weird decision, which can ruin the Venezuela’s private banking sector, as it is heavily dependent on state business that includes Banco Mercantil and Banesco. Banco Provincial is a unit of Banco Bilbao Vizcaya Argentaria and Banco de Venezuela is a subsidiary of Banco Santander Central Hispano. Both parent companies are Spanish. The announcement aroused concerns among investors. The share prices of Ternium SA slashed to a two-month low. After all these developments, the value of Venezuela’s debt has fallen and their yields have risen this week in international markets due to the uncertainty.

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