As the proposed sale of Chase Manhattan Bank’s Virgin Islands assets to V.I. Community Bank languishes in the territory’s bureaucratic backwater, a separate application process awaits in the British Virgin Islands.
The sale, terms of which have not been disclosed, would include VICB purchasing Chase’s nine branches and 15 ATMs on St. Thomas, St. Croix and St. John in the USVI and on Tortola in the BVI.
But for VICB to operate on Tortola, it would have to apply for a license. And approval depends on a variety of factors, including what territorial and federal regulatory bodies decide, according to Diana Maduro, inspector of banks, trust companies and company managers in the BVI’s Financial Services Department.
"The policy with the department is that we’re not at liberty to divulge whether we have received an application," Maduro said. "But none of our bank licenses have been issued" to VICB or its parent company, Innovative Communication Corp., owned by St. Croix businessman Jeffrey Prosser, she added.
She said an application is "thoroughly" reviewed with regard to its owners, directors, senior officers and capitalization.
"Each category of person is reviewed in terms of their fit and properness to conduct business within the British Virgin Islands," she said. "In this regard, we review personal details, police clearance certificates and reference letters on the directors and senior officers of the applicant."
Maduro said her office would contact the regulatory agencies in an applicant’s home country to find out whether they support the applicant establishing a branch or subsidiary in the BVI.
Currently, the USVI Banking Board is studying the proposed VICB-Chase sale. Although the application to sell was made to the Federal Deposit Insurance Corp., the banking board will issue a recommendation to the FDIC regarding the sale.
It is unclear what effect the upcoming bribery trial of ICC vice president John Tutein will have on the banking board’s decision. If he is found guilty, it could play a role in BVI officials’ decision on granting a license.
Once Maduro’s department has examined an application, it is submitted to the Minister of Finance and the Executive Council for refusal or approval. Among the things that would preclude a license being issued, Maduro said, are persons of "dubious repute associated with the applicant and regulatory issues."
Meanwhile, the USVI Banking Board is moving slowly. In his capacity as board chair, Lt. Gov. Gerard Luz James II said last week that he wouldn’t comment on the VICB-Chase sale other than to say he wants to "make sure everything is on an even keel."
"I don’t want to really speak out of turn," he said.
Including the Chase branches in the region, the proposed deal also includes Chase Trade Inc., a business that provides services to U.S. exporters.
Deposits in Chase’s business operations in the Virgin Islands are in excess of $500 million, with outstanding consumer loans totaling approximately $300 million. Commercial loans outstanding are approximately $37 million, Chase officials have said.
VICB, with two branches on St. Croix, has approximately $68 million in assets.
