Government agrees to buy Banco de Venezuela as it intervenes Industrial

May 14, 2009

The Government said that it had agreed to finally buy Banco de Venezuela, an affiliate of Banco Santander and it would close the transaction on May 22nd. This is not the first time the Government claims to have closed the deal, but what is perhaps most ironic is that at the same time it was announced the Government would intervene Banco Industrial de Venezuela, the state’s largest bank, after it found “irregularities” and losses of the order of US$ 90 million.

Banco Industrial de Venezuela has been capitalized twice during Chavez’ ten years in office and one of the reason to buy Banco de Venezuela is the stupid belief that if purchased, will magically run itself well in the hands of the Government. Banco Industrial de Venezuela managed these huge losses at a time when private commercial banks are making 20-30% returns on equity despite the extreme regulation by the Government.

Thus, another one billion dollar Chavez whim is completed and you can be assured that in a couple of years Banco de Venezuela will be run with the same lack of criteria as Banco Industrial.

Another billion down the drain…

4 Responses to “Government agrees to buy Banco de Venezuela as it intervenes Industrial”

  1. goggles Says:

    It’s going to be finish of mine day, but before end I am reading this wonderful post to improve my know-how.

  2. Banks .SX7P, up more than 160 percent from the March low, added the most points to the index.Barclays (BARC.L) was up 5.2 percent on market talk the British bank could raise its outlook.

  3. Roberto Says:

    I think GMAC beat them to the punch, but if enough Chavistas buy Chrysler Dealerships, they’d have new new source for financing their cars.

    Just think, you could buy the “Huguetto” a new model based on the famed K Car platform. Functions in fits and starts, the radio is permanently tuned to Radio Cadena and can never be shut off. The fuel gauge always reads full, even when empty, guaranteeing great mileage! It will never need to be fixed because it will never have a problem.

    And if you forget to make a payment, that’s OK. You can take over FI-CHRY-Industrial de Venezuela to avoid paying!

    Sign me up!

  4. Halfempty Says:

    Many Chrysler dealers are looking for new floorplan financing, FIAT-Chrysler-Banco de Venezuela, would be perfect.

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