2nd UPDATE: Venezuela's Chavez Threatens Banks Amid Housing Woes
December 08 2010 - 10:34AM
Dow Jones News
With a housing shortage in Venezuela, President Hugo Chavez
threatened to take control over the local unit of Spanish bank
Banco Bilbao Vizcaya Argentaria S.A. (BBVA, BBVA.MC) and other
banks if they don't ensure that homes and apartments they finance
are occupied immediately.
"Any bank that slips up... I'm going to expropriate it, whether
it's [BBVA Banco] Provincial, or [local banks] Banesco or Banco
Nacional de Credito," Chavez said Tuesday night.
In many cases, Chavez said banks receive a down payment from new
homeowners for a house or apartment, but then delay the move-in
process using "legal mumbo jumbo," and require more paperwork to be
filled out.
"If the apartment is ready for move-in, then it must be occupied
immediately," Chavez warned.
An official at BBVA Banco Provincial's press office in Caracas,
who asked not to be named, said Wednesday that the bank believes
Chavez's comments were aimed at banks in Venezuela in general, and
that he wasn't singling out BBVA.
Representatives at Banco Nacional de Credito and Banesco weren't
immediately available for comment.
The lack of sufficient housing for Venezuela's 28 million people
has been a problem in this oil-rich nation for decades, and during
Chavez's nearly 12 years in power, the problem has become worse, as
the population has grown. In Caracas and other large cities,
millions of people are forced to live in slums made of shoddily
constructed, ramshackle homes on hillsides.
This year, Venezuela has been dealing with some of the heaviest
rains and flooding in the past 40 years, making the housing problem
even worse because about 100,000 people have seen their homes
destroyed or deemed unlivable.
Chavez has threatened to expropriate banks in the past, saying
they must follow government orders to provide more loans to small
business owners and increase the number of home loans to poor
people in their portfolio.
The president's comments about BBVA Banco Provincial comes just
days after a former vice president to Chavez, Jose Vicente Rangel,
said that sources have told him BBVA's Venezuela unit is up for
sale at a price tag of about $2 billion.
The bank repeatedly denied the claims by Rangel, who is now a
journalist and the host of Sunday morning political talk show,
where he made the remarks.
"We reiterate our permanent commitment in Venezuela," the BBVA
Group said Sunday in a statement on its blog, in response to
Rangel's latest claim.
BBVA Banco Provincial has been in Venezuela for 11 years and is
among its largest banks in terms of deposits held.
Venezuela's banking system went through a mini-crisis a year
ago, when Chavez took over a handful of small banks, nationalizing
or liquidating them and jailing several bank executives. The
takeovers didn't extend to the big banks, and analysts say the
country's overall financial system is relatively healthy.
A Venezuela banking reform bill now wending its way through the
Chavez-controlled legislature would declare that banking activity
and banking services are a public service, which some analysts say
would make them "expropriatable" companies.
Chavez, who is trying to create socialism in Venezuela, has
nationalized more than 200 companies this year from various sectors
of the economy. That has caused many companies, including banks, to
wonder if they could be next.
-By Dan Molinski, Dow Jones Newswires; 58-414-120-5738;
dan.molinski@dowjones.com
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