The Synergy of Vidanova and SFT Bank

The recently announced acquisition of SFT Bank by Vidanova has actually been in the works for over a year. On January 1, 2016, Vidanova became a 67% shareholder in SFT Bank in an effort to align the two companies, and exactly one year later, they sealed the deal with the purchase of a further 14% of shares. TEXT BY HELEN GRIFFITH

The primary intention of this recent acquisition is to combine the portfolios of the two companies in order to create a more cohesive banking and pension fund offering. Vidanova has traditionally been a pension fund organization that was started in 1968 to execute pension services and arrange ments to companies in the utility sector. They later expanded their clientele to other companies in the private sector so as to maintain its profitability. Since then, they have continued to expand with the introduc tion of Pension Management services that provide pension administration services to companies with pre-existing pension funds. Vidanova has more recently implemented their Integrated Financial Services Concept. One of the pivotal aspects of this concept involves the acquisition of SFT Bank, in order to offer banking services to their pen sion clients. At the same time SFT has been gearing their focus towards local banking, and in par ticular mortgages. Initially, part of CITCO Banking Cooperation, a worldwide offshore banking company, in 1985 a local division called CITCO Bank Antilles was created

in answer to the growing needs of the local banking market. Ten years later, the official name was changed to SFT Bank N.V. and more recently they have further disengaged from CITCO and the offshore banking indus try, solely focusing on the local market and expansion of their mortgage services.

It seemed like the two companies were made for each other, and with Vidanova’s acqui sition of 82% of SFT’s shares, the bank was renamed Vidanova Bank. There are count less benefits that the two companies bring to the table as they integrate their products and services. Vidanova is able to offer full-ser vice pension and banking to their customers to further improve their service levels. In addition they are now able to offer joint financing to the employers. Banks usually provide short-term financing while pension funds usually provide longer-term financing. But the possibility of combining them into one product for the employer creates added value. “So the idea is not only to service the partic ipant but also the employer. And that’s the fit that we saw with Vidanova Pension Funds and SFT Bank,” as Charlene Alberto, Executive Director of Vidanova Pension Fund explained. From the banking perspective, since its acqui sition, Vidanova Bank is extending its mortgage and banking services to the pension fund clients. But there is even greater potential for growth as they are also expanding their services and tapping into new markets. The bank is now also focusing on the develop ment of a Bond Agency, managing the issuing of bonds and their registration on the Dutch

Caribbean Stock Exchange. Leo Rigaud, Managing Director of Vidanova Bank proudly notes, “That is a new product, and up to now we are the only bank that has issued such a bond.” Additionally, the bank is also commit ted to the continuation of development as an arranger of Consortium Financing, together with Vidanova Pension Fund.

With all the new products and services that the two companies have in the pipelines, they are actively reaching out to their customers

to effectively communicate the many benefits to be gained from this partnership. They also will be rolling out a new marketing strat egy geared towards the public in an effort to expand their customer base. And in antici pation of the many new large projects on the island that are either in the planning stages or already underway, the long-term strategy is to also focus on these emerging markets.

Yet in spite of their potential growth trajec tory, Vidanova Bank intends to stick to its roots and continue as a ‘Boutique Bank’ with high quality and more personalized customer service, and the opportunity for clients to contribute to the profit of their own pension fund through the use of the company’s bank ing services. When a customer banks with Vidanova Bank they create added value and profit for the company and that will translate itself into investing in their own pension. This is what makes the collaboration between Vidanova Pension Fund and Vidanova Bank such a unique synergy and a perfect fit. Indeed, with the collaboration of the two companies, together they emerge as a bigger player in the local market, enabling them to compete with other large financial insti tutions. As Mr. Rigaud notes, “That is for us, one of the biggest advantages of being acquired by Vidanova.” Ms. Alberto chimes in by adding, “We have formed our own consortium.”

NEWS BRIEFS

BLOCKCHAIN TECHNOLOGY: A SOLUTION AGAINST DE-RISKING PRACTICES TEXT BY HELEN GRIFFITH

De-risking is a common practice in the banking industry whereby financial institutions sometimes opt to sever business relationships from certain companies due to the high cost of regulatory compliance and the comparatively low returns. Developing countries are often hardest hit by these practices.

Earlier this year, the Economic Commission for Latin America and the Caribbean, (ECLAC), published a report indicating that blockchain technology may offer a solution to this problem. This technology of fers cryptographic measures that allow data to be safely shared across a large international network of servers and controlled by a vast number of international organizations. Because of its multiplicity, this system becomes decentralized and all records of transactions are digitally re corded across myriads of computers, making it impossible for records to be changed without subsequent blocks from other computers. Bit coin is perhaps one of the most widely recognized forms of blockchain technology.

As such, a well-designed blockchain network could provide an ade quate amount of transparency and enable the surveillance of all banking transactions to identify those that are fraudulent. Caribbean banks particularly stand to benefit from this technology because they would no longer be required to utilize correspondent banks, thereby reducing their transaction times and costs.

While this technology is still in its budding phase, and many issues such as privacy and international compliance regulations still need to be addressed, the report concludes that this could be a promising solution to the problem of de-risking practices.

GUANGDONG ZHENRONG ENERGY PRESENTS ITS PLANS FOR THE CURAÇAO REFINERY TEXT BY HELEN GRIFFITH

Representatives of the Chinese State Company, Guangdong Zhenrong Energy, recently gave a presentation to a cross-section of different stakeholders in the business community, regarding their plans for the development of the refinery once they have assumed management of the facility next year. They also laid out their plans for the construction of an LNG plant in the future. The Chinese company expressed their need for local qualified workers from different areas of expertise in order to fully realize their future plans. Attending the presentation was Prime Minister Eugene Rhuggenaath, and Minister of Labor and Social Development and Welfare, Hensley Koeiman. The Prime Minister reiterated that the government and the Chinese company are committed to making these development plans a reality.

CHATA CELEBRATES ITS 50TH ANNIVERSARY TEXT BY HELEN GRIFFITH

This year, the Curaçao Hotel and Tourism Association, (CHATA), marks their 50th anniversary since its inception. Originally the association was formed to provide a collective board that would make a unified effort in the promotion of Curaçao as a premium hospitality and tourism product. To this day, the CHATA has become a resource for insight and expertise in the field through its collaborative partnerships with stakeholders in the hotel industry. One of CHATA’s key priorities for this year is to facilitate the cooperative efforts that are made in conjunction with the Curaçao Tourist Board, (CTB), in their new Tourism Master Plan.