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September 27, 2016

Who owns the financial sector in Belize?


Posted: Tuesday, September 27, 2016. 9:28 am CST.

Posted: Tuesday, September 27, 2016. 9:27 a.m. CST.
 central bank

By Richard Harrison: The domestic commercial banks are owned 28% by Belizeans, 0% by CARICOM citizens, 25% by USA citizens, 12% by UK citizens, 20% by Canadian citizens and 15% by Other Extra-Regional (Honduran).

The international banks are owned 18% by Belizeans, 9% by CARICOM citizens, 24% by US citizens, 33% by UK citizens, 0% by Canadian citizens and 16% by Other Extra-Regional.

Credit Unions are owned 100% by Belizeans.

Development financing (DFC and National Bank) are owned 100% by Belizeans.

Life Insurers are owned 2% by Belizeans, 98% by CARICOM.

Non-life Insurers are owned 31% by Belizeans, 67% by CARICOM and 2% by Other Extra-Regional.

Composite Insurers are owned 1% by Belizeans, 99% by Other Extra-Regional.

These numbers are based on paid-up share capital in these financial institutions.

Over a period of 10 years (2004 to 2014), the assets of the financial system rose by 88.7% to BZ$5.7 billion.

At 52.8%, the domestic banks represented a little more than half of the financial system’s assets, accounting for $3.0 billion or 88.2% of GDP, while asset holdings of international banks amounted to $1.6 billion or 27.7% of financial system assets (46.3% of GDP). With membership representing approximately 41% of the Belizean population, credit unions represented the third largest segment, accounting for 13.5% of financial sector assets or $765 million. The one development financing institution, DFC, accounts for a mere 1.6% of the financial market or $91 million but, nevertheless, plays a pivotal role in meeting government’s financial inclusion objectives. Domestic insurance companies held $233 million in assets.

One loan in 2014, for $50 million, accounted for around half of the total loans given out by commercial banks that year….this loan was to Santander for its sugar project.

This information was obtained from the Central Bank of Belize Annual Financial Stability Report 2014.

There is excess liquidity in the banking system, because demand for loans from domestic and foreign investors is way down….confidence in the economy is at an all time low.

Belize needs to save more in and borrow more from the Credit Unions.

The Credit Unions need to invest more and faster in improving its capacity and capability to provide financial services by improving management and management systems….and the Central Bank of Belize needs to improve its rules and oversight of the Credit Unions to ensure security for depositors.

My question is: how does a Belizean become a shareholder in a domestic commercial bank or international bank? Do they sell shares on the domestic market to interested Belizeans? If so, where does one go to inquire into and/or purchase shares?

The views expressed in this article are those of the writer and not necessarily those of Breaking Belize News.

This article was written by Richard Harrison, Belizean investor in production and services businesses in Belize. He holds a Master’s in Business Administration degree from Lancaster University.



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