Venezuela: Major bank to be nationalised

Venezuelan President Hugo Chavez announced plans to nationalise one of the countries largest banks, the Bank of Venezuela, according to a July21 report.

The bank is owned by the Spanish Grupo Santander conglomerate, and Chavez has called for a meeting to discuss compensation for the takeover. The Santander Group has US$700 million invested in the bank and it is has the third largest amounts of deposits (10.7%) in Venezuela, with the fourth largest credit portfolio (11.8%).

The bank was privatised in 1996 and the nationalisation continues the Chavez government's stated policy of "renationalising all that was privatised". The government renationalised one of Latin America's most significant steel companies in April and nationalised a number of oil fields, electricity companies and a telecommunications company last year.

The government has also nationalised the cement industry this year. The drive to take key industries out of corporate hands is part of the strategy of promoting socially just national development to over come poverty.

According to a July 31 Bloomsberg report, Chavez stated: "We'll put it at the service of Venezuela, because the bank was very profitable."

A July 31 Wall Street Journal report, accusing the government of "an aggressive expansion of the state into the financial sector", quoted Chavez as justifying the take-over on the grounds that the bank "makes a lot of profit, but takes it out of the country".