Feb 2009 Financial News

$$ for CIB depositors from today

Feb 25, 2009

Customers at dissolved financial services company CLICO Investment Bank will from today be able to recover their deposits that in total amount to several hundred million dollars.

Staff members at State bank First Citizens will complete processing depositors' claims at the banquet hall of the Queen's Park Oval, Port of Spain, from this morning.

Customers whose deposits have matured up to February 28 are the ones being considered at this time, First Citizens chief executive officer Larry Howai said.

CIB depositors will also be able to recover their funds tomorrow and Friday.

"We will be dealing with customers whose deposits have matured on February 28 or before and depending on the flows of customers, we will have another schedule for customers," Howai told the Express in a phone interview on Sunday.

"We want to avoid too many lines so we will take it on a phased basis until the end of March."

By the end of next month, he said the bank, which assumed control of the assets and liabilities of CIB at the end of January, expected to complete the redemption claims of all CIB depositors.

There will be one blackout period for redemptions when cricket is held at the Oval late next month but this will not affect customers getting back their investments, Howai said.

CIB was one of four subsidiaries of insurance powerhouse CL Financial that were rescued by Government and the Central Bank on January 30 after chairman Lawrence Duprey approached the State for help when the firms could not meet their financial commitments to depositors and investors.

The others are insurance companies CLICO and British American and brokerage house CMMB in Port of Spain.

In return, CL Financial has agreed to divest or sell some of its prized assets including its 55 per cent stake in Republic Bank (the country's largest commercial bank) and its controlling interest in Methanol Holdings Trinidad Ltd, which operates five plants at Pt Lisas.

In 2006, CIB controlled assets of more than $3.7 billion but by the end of 2008 was unable to redeem deposits to firms like the National Gas Company which had matured claims of about $200 million.

First Citizens had projected to initially begin CIB payments by February 9.

But two Fridays ago, Central Bank Governor Ewart Williams said the process would be completed later because of the state CIB's accounts were said to be in.

The Central Bank has authorised a first-tranche payment of $1 billion to cover CIB and CLICO deficits.

CLICO has a statutory fund reserve deficit of $10 billion and has pension commitments to customers of approximately $40 million a month.

It has only $15 million in bank savings, the Central Bank said.

Thirty-seven of 91 CIB workers were sent home earlier this month after the company was dissolved.

Banking, Insurance and General Workers Union president Vincent Cabrera has held discussions with the Central Bank in an attempt to secure severance benefits for the staff members.


Source:
Curtis Rampersad
Trinidad Express
Wednesday, February 25th 2009

http://www.trinidadexpress.com/index.pl/article_business?id=161443893