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| Bank of Saint Lucia |
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| Summary of Proposed Investment |
| This Summary of Proposed Investment is prepared and distributed to the public in advance of the IFC Board of Directors’ consideration of the proposed transaction. Its purpose is to enhance the transparency of IFC’s activities, and this document should not be construed as presuming the outcome of the Board decision. Board dates are estimates only. |
| Project number | 26786 |
| Company name | Bank of Saint Lucia Limited |
| Country | Saint Lucia |
| Sector | Finance & Insurance |
| Environmental category | FI |
| Department | Global Financial Markets Group |
| Status | Pending Signing |
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| Date SPI disclosed | February 12, 2008 |
| Projected board date | March 13, 2008 |
| Previous Events | Approved: May 8, 2008 |
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| Overview |
Sponsor/Cost/Location |
Development Impact |
Contacts |
Attachments |
| Project description |
| The proposed project consists of a $20 million loan to the Bank of Saint Lucia (the Bank) the largest commercial Bank in St. Lucia. The proceeds from the transaction will be used to support the Bank’s growth and diversification strategy. Additionally, IFC will explore the feasibility of providing Advisory Services to help strengthen the Bank’s long-term SME strategy and capacity. |
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| Project sponsor and major shareholders of project company |
| The Bank is a fully owned subsidiary of the East Caribbean Financial Holding Company Limited (ECFH) which is listed on the Eastern Caribbean Securities Exchange. ECFH was established in 2001 following the successful merger of the largest commercial bank (National Commercial Bank of Saint Lucia) and the sole development bank (Saint Lucia Development Bank) in Saint Lucia. Bank of Saint Lucia is the largest of ECFH subsidiaries, accounting for approximately 70% of Group assets. Other key subsidiaries include EC Global Insurance Company Limited, Bank of Saint Lucia International Limited, Mortgage Finance Company of Saint Lucia Limited, and Property Holdings and Development Company of Saint Lucia Limited. The major shareholders of ECFH are the Government of Saint Lucia (20%), Republic Bank (20%) and the National Insurance Corporation (15%). |
| Total project cost and amount and nature of IFC's investment |
| The proposed IFC investment is a $20 million A loan for IFC’s own account. The investment will be used to strengthen the Bank’s financial fundamentals through funding diversification and to support the Bank’s growth strategy. |
| Location of project and description of site |
| Bank of Saint Lucia is headquartered in Castries. The Bank’s five branches across the country provide it with the largest branch network in Saint Lucia. IFC’s investment can be used to support the Bank’s growth both domestically and regionally. |
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| Anticipated development impact of the project |
The project will serve the following purposes:
The project will assist the Bank increase the quantity and average maturity of its loans to both the corporate and retail sectors of the economy.
In addition, the project may potentially provide Advisory Services to help strengthen the Bank’s strategy and capacity in SME finance, which would be phased in as part of the Bank’s long-term growth strategy. |
| IFC's expected development contribution |
The project is expected to contribute to the strengthening of a locally owned bank as it will enable the Bank to offer wider financing options to a broad cross-section of existing and potential clients. Such financing is important for the sustainable development of the private sector across the country and is expected to result in improved economic development.
The project is also expected to contribute to increased competition in the financial sector, which is particularly important for a domestic bank that is faced with regional consolidation led by international financial institutions.
In addition, the Bank will need to comply with IFC’s social and environmental management standards, and IFC will assist the Bank to establish a Social and Environmental Management System (SEMS). |
| Environmental and social issues - Category FI |
This project has been classified as a Category FI project according to IFC’s Environmental and Social Review Procedure.
During appraisal, IFC will analyze the FI portfolio and the activities proposed to be supported with IFC financing for types of transactions, size, tenor and industry sectors and determine the Applicable Performance Requirements, if any, that would include a combination of:
- The IFC FI Exclusion List,
- The applicable National Social and Environmental Laws and regulations, and/or
- The IFC Performance Standards.
IFC will also review, if required, the capacity of the FI to manage social and environmental risks and to establish and maintain a Social & Environmental Management System (SEMS). If required, IFC will suggest Supplemental Actions to address any gaps in the SEMS.
Based on the review, the project will be required to:
- Develop or upgrade, if necessary, a Social & Environmental Management System (SEMS), prior to disbursement, to the satisfaction of IFC;
- Identify responsible, qualified persons to manage and implement the SEMS;
- Commit to implement the SEMS, to ensure that its investments/activities supported by IFC financing are in compliance with the Applicable Performance Requirements;
- Submit a periodic report to IFC as per a format to be provided by IFC. |
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| For inquiries about the project, contact: |
Donna Matthew, Risk Management Department
East Caribbean Financial Holding Co. Ltd.
1 Bridge St.
Castries, St. Lucia
Telephone: 758-457-7225
Fax: 758-456-6702 |
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| For inquiries and comments about IFC, contact: |
General IFC Inquiries
IFC Corporate Relations
2121 Pennsylvania Avenue, NW
Washington DC 20433
Telephone: 202-473-3800
Fax: 202-974-4384
E Mail: Webmaster |
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