Chávez chews out Banco de Venezuela head for stingy lending practices

Wednesday, March 23, 2011

Venezuelan President Hugo Chávez gave the head of state-owned Banco de Venezuela a dressing down during a live television broadcast for being too stingy with credit, even though the bank has grown its credit portfolio at a faster rate than its private sector peers since the government bought it in 2009.

"Banco de Venezuela has to be for socialism, and it cannot be governed by the patterns of capitalism. We've talked about this 100 times, and you know it," Chávez said after calling Banco de Venezuela president Humberto Ortega Díaz on a cell phone.

The dressing down of a bank executive via cell phone on live television is not unusual in Chávez' weekly TV broadcasts in recent months. However, Chávez has never before excoriated a public sector bank president in this way.

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He was provoked by complaints from an audience member who said paperwork requirements at a community lending office known as a TBcom and run by Banco de Venezuela made it easier to get loans at private sector banks.

Chávez told Ortega that the bank needed to loosen its requirements "because if we open the TBcoms to continue with the same methodology as a banking sector that doesn't serve the poor, what are we opening them for?"


Nevertheless, the numbers from bank regulator Sudeban seem to suggest that Banco de Venezuela is actually already quicker on the draw than its private sector competitors.

Through the end of January, Banco de Venezuela had a credit portfolio worth 21.5bn bolívares, up 50% in 19 months since the government bought the bank in mid-2009.

During the same period, Banesco - the country's largest bank by assets - expanded its loan portfolio by 42.6% and Mercantil - another top-three private sector bank - by 17%, according to Mercantil documents and Sudeban statistics.