Published On: Thu, Apr 24th, 2014

Could DAE have been one of the causes for the downfall of Giro Bank’s management?

Eric GarciaWILLEMSTAD – The investments made by Giro Bank N.V. in the defunct local airline Dutch Caribbean Express (DAE) and also other dubious decisions made by the bank’s former management, may have put the bank in a delicate position, which could have negative consequences for the entire financial sector in Curacao.

The rescue operation initiated by the Central Bank of Curacao and Sint Maarten (CBCS) is giving good results. The situation within the bank is developing in a positive atmosphere, which brings back the needed trust from its clients.

The CBCS intervened mid December 2013 and took control of the operations of the Giro Bank N.V., much to the surprise of the bank’s clients as clients had the assumption the bank was doing well. The CBCS intervention came after a court’s decision.

The adventure of pumping money into a dying airline, DAE, compromised the bank’s solvency. Other decisions made by the bank’s management to rescue millions of dollars invested in DAE, proved to be useless.

Another investment decision which proved to be a fiasco was the financing of the newly designed headquarters for the Curacao Emergency Medical Services (CEMS) in Emmastad. The bank suffered major losses after CEMS was dissolved and the ambulance services were integrated with the Health Department (GGD). These are just a few of the investment decisions made by the bank’s management, which brought Giro Bank where it currently is.

The bank also announced the purchase of a luxurious building located at Schottegat weg east. This announcement came after it was already known that the bank has lost its solvency and was in the danger zone.

No one wanted to talk about what was really happening within the bank. They feared losing the clients’ trust in the financial institution and could end up clients withdrawing all their money. That is something the bank cannot handle at this moment.

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