VÍCTOR SALMERÓN
EL UNIVERSAL

In an unequivocal measure to consolidate a model where the government is the lynchpin of economy, Hugo Chávez announced the nationalization of Banco de Venezuela, the local branch of Spanish banking giant Banco Santander.

"I am interested in buying. We are going to nationalize Banco de Venezuela," said Chávez in a country-wide compulsory radio and television broadcast. 

The Venezuelan Head of State said emphatically that Spain's Grupo Santander, which bought Banco de Venezuela from the government in 1996, had agreed to sell the bank. The Spanish group had asked the Venezuelan government for permission to sell the bank to a private investor, but Chávez refused to authorize the operation.

"I have a copy of a preliminary agreement between Spain's Grupo Santander and a Venezuelan banker. The Venezuelan banker needed permission from the government to complete the deal [...] but I sent a message to the Spaniards, 'No.' And to the Venezuelan banker, 'No.' Now the government wants to buy the bank," said Chávez.

The Venezuelan leader conceded there has been a verbal clash with the Spanish group. "Now the owners are saying that they are no longer interested in selling [...] But now I say I am interested in buying. How much does it cost? We will buy it."

"They were desperate to sell the bank. They even tried to put pressure on me [...] I do make decisions while under pressure," Chávez said. And anticipating the days to come, called upon "the owners to come here. Let us negotiate."

Rumors have circulated in the financial market that Víctor Vargas, the President of Venezuela-based Banco Occidental de Descuento, had agreed to buy Banco de Venezuela for a total of USD 1.2 billion.

Chávez justified the new foray of the government into the financial sector by arguing that "we are going to rescue Banco de Venezuela to put it at the service of Venezuela, and of the Venezuelan economy. We are very much in need of a bank this size."

Accounting for 11.59 percent of total loans and 11 percent of deposits, Banco de Venezuela is the country's third largest bank and, together with the rest of Venezuelan state banks: Industrial, Banfoandes, Banco del Tesoro and Banco Agrícola, it may become the most important financial group in the nation.

Translated by Gerardo Cárdenas