offer for sale of 2,000,000 ordinary shares pr …1).pdf · eccsr eastern caribbean central...

1BOSVGIPO PROSPECTUS

Parent company of: Bank of Saint Lucia Limited | Bank of Saint Lucia International Limited Bank of St. Vincent & The Grenadines Limited EC Global Insurance Company LimitedECFH Global Investment Solutions Limited

PROSPECTUS

OFFER FOR

SALE OF

2,000,000

ORDINARY

SHARES

2 BOSVG IPO PROSPECTUS

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IMPORTANT DISCLAIMERS ECSRC Disclaimer In accordance with section 92 (1) (b) of the St. Vincent and the Grenadines Securities Act, No 29 of 2001 (the Act), part VII of the Act does not apply to offers of corporate securities that are made by participating governments. The ECSRC accepts no responsibility for the contents of this Prospectus, make no representations as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss whatsoever arising from or reliance upon the whole or any part of the contents of this Prospectus. Prospective investors should not construe the contents of this Prospectus as legal or financial advice. If in doubt about the contents of this document or in need of financial or investment advice, prospective investors are advised to consult a person licensed under the Securities Act who specializes in advising on the acquisition of shares and other securities. CONTENTS OF PROSPECTUS This Prospectus contains important information for prospective investors in the Company. All prospective investors should read this prospectus carefully in its entirety before submitting an Application Form. The Government of St Vincent and the Grenadines declare that to the best of its knowledge that information contained in the prospectus is in accordance with the facts and that the prospectus makes no omission likely to affect the import of the information. The Board of Directors of BOSVG declares that the accounts have been prepared in accordance with the Securities Act 2001 of the laws of St. Vincent No. 23 of 2001 and accepts responsibility for these statements. The Management of the Bank of Saint Vincent and the Grenadines Limited consents to the inclusion of the September 30, 2012 management accounts in this prospectus and accepts responsibility for these statements. Prospective investors may wish to inspect the actual documents that are summarized, copies of which will be available for inspection. Any documents appearing in this Prospectus are qualified in their entirety by reference to the complete document. The publication of this Prospectus shall not imply that there has been no change in the business, results of operation, financial condition or prospects of the Company since the date of this Prospectus. No person is authorised to provide information or to make any representation whatsoever in connection with this Prospectus, which is not contained in this Prospectus.

The Invitation is made to St. Vincent and the Grenadines Residents and ECCU Residents ONLY This Prospectus is intended for use in the Eastern Caribbean Currency Union (ECCU) only and is not to be construed as making an invitation to persons outside of the ECCU to subscribe for any Shares. The distribution or publication of this Prospectus and the making of the invitations in jurisdictions outside of the ECCU is prohibited.


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PURPOSE This is a Prospectus for the subscription of an Initial Public Offering (IPO) of ordinary shares in the Bank of St. Vincent and the Grenadines Limited (BOSVG) under the terms and agreement between BOSVG and the Government of St. Vincent and the Grenadines to partially divest its holdings in BOSVG.

The shares are issued on the terms and conditions contained in this Prospectus, and no person has been or will be authorized to give any information or to make any representation with regard to Share offering other than through this Prospectus. Responsibility for the Contents of this Prospectus This Prospectus is issued for the purpose of giving information to prospective investors, both private and institutional, about Bank of St. Vincent and the Grenadines Limited and the share issue in particular. The Government of St. Vincent and the Grenadines Limited accepts full responsibility for the accuracy of the accounting, technical and general information given and confirm that to the best of its knowledge and belief there are no other facts, the omission of which would make any statement in this Prospectus misleading.

The delivery of this Prospectus to a prospective investor at any time and the subsequent allocation of shares do not imply that the information contained herein is correct at any time subsequent to the date of this Prospectus.


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THE CHAIRMAN’S LETTER

We are today at the portal of a new era in banking and finance in St. Vincent and the Grenadines, and it is with a sense of pride and confidence that we invite you to participate in this historic event – the Initial Public Offering (IPO) of the shares of the Bank of St. Vincent and the Grenadines Ltd., formerly the National Commercial Bank (SVG) Ltd, to the citizens of St. Vincent and the Grenadines and of the Eastern Caribbean Currency Union. In November 2010, the Government of St. Vincent and the Grenadines, as part of its divestment strategy, sold 51% of its shareholding in Bank of St. Vincent and the Grenadines to the East Caribbean Financial Holding Company (ECFH) of St. Lucia, now the largest indigenous financial institution based in the Eastern Caribbean Currency Union. This was the first step in the transformation and modernization phase of the Bank, which has already been put in full gear with the implementation of a number of critical initiatives over the past eighteen months. By going public, the Bank is reinforcing its place in the fabric of life in St. Vincent and the Grenadines and the wider OECS, and it is signaling its commitment to the continued growth and development of the region. The divestment strategy commenced with the sale of the 806,590 shares to the National Insurance Services, and 93,410 shares to the employees of the Bank. The occasion of this Initial Public Offering (IPO) represents the first listing of a Vincentian company on the Eastern Caribbean Securities Exchange. We are backed by a well-capitalized parent company. Regulated by the Eastern Caribbean Central Bank (ECCB) based in St. Kitts and Nevis, the Bank of St. Vincent and the Grenadines Ltd. has remained on a sound financial path despite the economic challenges that continue to impact the global economy. While the global economy is not yet out of the woods, the fundamentals of the Bank are expected to be maintained, and be poised for improvement as we head out of the recession. The contribution of the Bank to the social and economic development of St. Vincent and the Grenadines is profound. The Bank, dubbed the “Nation’s Bank” for much of its existence, has allowed many Vincentians to realize their dreams and aspirations, whether in the area of education, home ownership, or commercial enterprise – large, medium, and small. It has contributed immensely to every sector of our society in fulfillment of its corporate social responsibility mandate through its many community-oriented projects over the years. Internally, the Bank has invested heavily in the development and advancement of its own workforce, through a number of human resource development programmes. So the IPO is more than just a mere divestment of shares by the Government of St. Vincent and the Grenadines. It is about the continuing journey of partnering with the community, the country and the region in our collective quest for growth and prosperity. We are especially proud that citizens of St. Vincent and the Grenadines are now afforded the opportunity to be actual owners of an institution which has been considered a symbol of national pride since its establishment 35 years ago in June 1977. Today, we invite you, the citizens of St. Vincent and the Grenadines and the OECS to share in the ownership and participate more directly in the growth and development of your bank – Bank of St. Vincent and the Grenadines – the bank that gives you more!


TABLE OF CONTENTS

DEFINITIONS AND ACRONYMS 6CORPORATE INFORMATION 71. OFFER DETAILS 9 SUMMARY 9 DESCRIPTION OF SECURITIES 102. RISKS OF OFFERING 133. DIRECTORS 154. SENIOR MANAGEMENT 175. OVERVIEW OF COMPANY 186. FIVE YEAR PERFORMANCE ANALYSIS 1910. ECONOMY OVERVIEW 2411. MONEY LAUNDERING POLICY 2512. MATERIAL CHANGES REPORTING 2513. MATERIAL LITIGATION 2514. MATERIAL CONTRACTS 2515. MATERIAL INTEREST 2516. MATERIAL RELATIONSHIPS 2517. DIRECTOR RENUMERATION 2518. DISCLOSURE OF CONFLICTS OR POTENTIONAL CONFLICTS OF INTEREST 2519. DOCUMENTS AVAILABLE FOR INSPECTION 2620. PERFORMANCE FIGURES – BANK OF SAINT VINCENT AND THE GRENADINES LIMITED (BOSVG) & ECFH FINANCIAL HIGHLIGHTS 2721. PROJECTED FINANCIAL STATEMENTS 3322. ASSUMPTIONS TO THE PROJECTIONS 3523. APPENDICES 37 APPENDIX 2: INDEPENDENT COMPANY VALUTION REPORT 40 APPENDIX 3: AUDITORS REPORT 47 APPENDIX 4: LIST OF LICENSED ECSE MEMBER BROKER DEALERS 53 APPENDIX 5: LIST OF LICENSED ECSE MEMBER BROKER DEALERS 55TERMS, REPRESENTATIONS & WARRANTIES OF THE OFFER 58


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DEFINITIONS AND ACRONYMS

CARICOM Caribbean Community and Common Market CPI Consumer Price Index

CHAIRMAN President of the Board of Directors COMPANY / ISSUER Bank of St. Vincent and the Grenadines Limited (BOSVG)

DCF Discounted Cash Flow DPS Dividend per Share ECCSD Eastern Caribbean Central Securities Depository Limited ECCB Eastern Caribbean Central Bank ECFH East Caribbean Financial Holding Company Limited ECCU Eastern Caribbean Currency Union

ECSE Eastern Caribbean Securities Exchange EC$ Eastern Caribbean dollar, the lawful currency of the Eastern Caribbean Currency Union ECSRC Eastern Caribbean Securities Regulatory Commission ECCSR Eastern Caribbean Central Securities Registry EPS Earnings per Share GOSVG Government of St. Vincent and the Grenadines GDP Gross Domestic Product

GROUP East Caribbean Financial Holding Company Limited IPO Initial Public Offering IFRS International Financial Reporting Standards IVS International Valuation Standards Lead Broker/ Arranger ECFH Global Investment Solutions Limited Licensed Broker/ Dealer Broker/ Dealers licensed by the ECSRC and registered with the ECSE Market Capitalisation is the total value of the tradable shares of a publicly traded company; it is equal

to the share price times the number of shares outstanding. As outstanding stock is bought and sold in public markets, capitalization could be used as a proxy for the public opinion of a company's net worth and is a determining factor in some forms of stock valuation. Preferred shares are not included in the calculation.

NAV Net Asset Value OECS Organization of Eastern Caribbean States P/E Ratio Price Earnings Ratio SHARES 2,000,000 available BOSVG Ordinary Stocks Substantial Shareholder A person who has an interest in shares in the company:

1. The stated value of which is equal to or more than 5% of the capital of the company or;

2. This entitles the person to exercise or control the exercise of 5% or more of the voting power at a general meeting of the company.


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CORPORATE INFORMATION These securities have been issued by: Bank of Saint Vincent and the Grenadines Limited Reigate Building Granby Street P.O. Box 880 Kingstown ST. VINCENT AND THE GRENADINES, VC Telephone Number: 784 457 1844 Facsimile Number: 758 456 2612 The Bank of Saint Vincent and the Grenadines Limited, a limited liability company, was incorporated on June 1, 1977 at Kingstown, St. Vincent under Chapter 219 of the Companies Act of 1994; for the purpose of providing commercial banking services. BOSVG is licensed under the Banking Act No 33 of 2006 of St Vincent and the Grenadines. This prospectus was prepared by: ECFH Global Investment Solutions Limited, #1 Bridge Street, Castries, ST. LUCIA, W.I. Telephone Number: 758 457 7233 Facsimile Number: 758 456 6740 Email: [email protected] Contact Persons:

Ms. Beverley Henry Registered Principal Mrs. Donna Matthew Registered Principal Ms. Dianne Augustin Senior Merchant Banking Officer

Ms Deesha Lewis Investment Broker ECFH Global Investment Solutions Limited has been appointed the Arranger and Lead Broker for this IPO. This prospectus is published on December 27, 2012 ECFH Global Investment Solutions Limited has been appointed the Arranger of this Offer on a best effort basis. Auditors: Ernst & Young PricewaterhouseCoopers P.O. Box 261 Pointe Seraphine Worthing Castries Christ Church St. Lucia Barbados Telephone Number: 758 452 2511 Telephone Number: 1 246 430 3900 Facsimile Number: 758 452 1061 Facsimile Number: 1 246 426 9551 (From 2012 to present) (December 2010 to December 2011)

BDO Sergeant – Jack Drive Arnos Vale P.O. Box 35 Kingston VC0100 St. Vincent Telephone Number: 1 784 456 2300 Facsimile Number: 1 784 456 2184 (From 2005 to June 2010)


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Legal Advisers: Williams & Williams Chambers, Middle Street P.O. Box 589 Kingstown St. Vincent Telephone Number: 784 456 1757 / 784 528 7029 Facsimile Number: 784 456 2259 Grahame Bollers Regal Chambers Second Floor, Regal Building Middle Street Kingstown, St. Vincent Telephone Number: 784 457 2210 Facsimile Number: 784 457 1823

Cardinal Law Firm 114 Granby Street P. O. Box 401 Kingstown St. Vincent Telephone Number: 456 1954 Facsimile Number: 451 2391

Regulators: Eastern Caribbean Central Bank (ECCB) Eastern Caribbean Securities Regulatory Commission (ECSRC) P.O. Box 89 ECCB Financial Complex Bird Rock P.O. Box 1855 Basseterre Basseterre St Kitts St. Kitts Telephone Number: (869) 465-2537 Telephone Number: (869) 465-2537 Facsimile Number: (869) 466 8954 Facsimile Number: (869) 465-7512

Summary of the issuer’s constitution determining it objects: Main Type of Business the company carries on: Banking Classes and any maximum number of shares the company is authorized to issue: The company is authorized to issue an unlimited number of common shares of no par value with the rights, privileges, restrictions and conditions set out in section 27 of the Companies Act 1994 of the Laws of St. Vincent and the Grenadines Restrictions if any on the business the company may carry on: The Company is restricted from carrying on any business prohibited by the Banking Act Restriction if any on share transfers: No shares in the capital of the company shall be transferred without the approval of the holders of more than 50% of the shares of that class for the time being outstanding or by a majority of the directors of the company evidenced by written resolution who may in their absolute discretion and without giving any reasons therefor decline to register a transfer Number (or minimum and maximum number) of directors: There shall be a minimum of 7 and a maximum of 13 directors


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1. OFFER DETAILS

SUMMARY This Prospectus contains information about the Initial Public Offer (IPO) of a total of 2,000,000 ordinary shares in the Bank of St Vincent and the Grenadines, by the Government of St Vincent and the Grenadines. The terms of the IPO are outlined below:

Summary of Offer

Offerer: Government of St Vincent and the Grenadines

Issuer: Bank of Saint Vincent and the Grenadines P.O. Box 880, Kingstown, St. Vincent and the Grenadines Number of Ordinary Shares Offered: 2,000,000 Minimum Offer: 2,000,000 Maximum Offer: 2,000,000 Offer Price per Ordinary Share: $8.64 Class of securities: Common Shares Minimum Subscription: 50 shares (units) and multiples of 5 thereafter. Offer Amount: EC$17,280,000.00 Purpose: Partial Divestment of GOSVG’s holdings in BOSVG Use of Proceeds: Proceeds will be paid directly to GOSVG Currency: Eastern Caribbean Dollars Offer Opens: December 27, 2012 Offer Closes: January 25, 2013 Settlement / Delivery of shares: January 31, 2013 Tax Status: All withholding taxes, duties, assessments or charges, current, will be

for the account of the individual subscribers. Listing: It is the intention of the BOSVG to make application for its shares to be

listed on the ECSE. Settlement: Settlement of securities will occur on January 31, 2013

Unsuccessful Bids: Refunds in respect of shares applied for but not allotted will be made to

all of the applicants concerned through their brokers within five (5) business days of the close of the allotment period. The funds will be held on a non interest bearing segregated account until the allotment process has been completed. Funds will be paid to clients as per instructions on the purchase order form.


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Subscription Fee: Commissions and brokerage fees are to be borne by the subscribers.

No fees are due to Bank of Saint Vincent and the Grenadines for this transaction. A list of licensed Intermediaries is provided in Appendix 3.

Dividends: Bank of Saint Vincent and the Grenadines plans to declare and pay dividends to the holders of ordinary shares each year. The amount of any dividend so declared will be determined after reviewing the Company’s cash flows, earnings, financial position, debt retirement obligations if any, and other factors including the need to provide for growth and reserves as determined by the Board of Directors. See section 9 of the prospectus for details of the dividend policy.

Rights: Each ordinary share ranks equally as to capital, dividend and right upon

liquidation and carries one vote at all shareholders’ meetings.

Restrictions: No shares in the capital of the company shall be transferred without the

approval of the holders of more than 50% of the shares of that class for the time being outstanding; or majority of the Directors of the company evidenced in written resolution that may in their absolute discretion and without giving reason thereof decline to register a transfer.

DESCRIPTION OF SECURITIES This IPO is pursuant to the Shareholders agreement of November 1, 2010.

The shares offered are ordinary shares of Bank of St. Vincent and the Grenadines Limited, and are ranked equally as to capital, dividend and rights upon liquidation and carries one vote at all shareholders’ meetings.

Shareholders on record following the close of the IPO will be entitled to any future dividends declared by the Company.

Bank of St. Vincent and the Grenadines Limited will be listed on the ECSE, as a result the shares will be held in a dematerialised or uncertificated form. As such, no certificate will be issued, rather, Shareholders’ records will be held in a book entry in the electronic registry of the Eastern Caribbean Central Securities Registry Limited (ECCSR), a subsidiary of the ECSE, and statements will be issued annually from the ECSSR.

The ECCSR, when appointed registrar of Bank of St. Vincent and the Grenadines Limited shares, will maintain and service shareholders’ records on behalf of the Company.

Upon listing, the ECSE shall serve as the trading platform for the general buying and selling of the securities, in the secondary market. Transfers of these securities will then be subject to the requirements and restrictions of the Eastern Caribbean Central Securities Registry. Currently, the transferability of these shares are restricted by the Articles of Amalgamation, dated 28 April 2009, which states that ‘no shares in the capital of the company shall be transferred without the approval of the holders of more than 50% of the shares of that class for the time being outstanding; or majority of the Directors of the company evidenced in written resolution that may in their absolute discretion and without giving reason therefor decline to register a transfer.’ However, it is anticipated that this restriction lifted prior to the intended listing, as this is a requirement of the ECSE. The Bank of St Vincent and the Grenadines is licensed under the Banking Act No 33 of 2006 of St Vincent and the Grenadines. In accordance with Section 9(1) (a) of this Act, no person may acquire directly or indirectly 20% of the issued ordinary shares of a company except with ECCB’s approval.


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Availability of the Offer and Subscription Period

The Offer opens December 27, 2012 at 9.00am and closes on January 25, 2013 at 2.00pm.

Procedure for purchase of Ordinary Shares

Subscription for ordinary shares in the IPO by members of the public, institutional investors and any other investors may be made by using the services of ECFH Global Investment Solutions Limited or any other ECSE-Member Broker/ Dealer . The List of Broker/ Dealers is provided in Appendix 3. Subscriptions are subject to the Terms and Conditions of the IPO.

Each Subscription form must be completed in accordance with the Terms and Conditions of the Prospectus and lodged with full payment with any ECSE-Member Broker/Dealer.

All subscriptions in excess of EC$25,000.00 must be submitted with a completed Source of funds form available at any ECSE-Member Broker/ Dealer.

All Subscriptions are irrevocable after submission and when received by any of the ECSE-Member Broker/Dealer. A maximum of three joint applicants is allowed for each subscription. In such a case a primary shareholder will be identified.

As shareholders’ records will be held in book entry form at ECCSR, no physical certificate will be issued to successful applicants in respect of the shares allotted in this Offer. The ECCSR, as the registry for BOSVG’s shares, will send by mail to each successful applicants (as the new shareholders of the offered shares) details of their new holdings upon completion of the allotment process.

The ECSE shall serve as the trading platform for the general buying and selling of the shares in the secondary market, after listing of BOSVG.

The Eastern Caribbean Central Securities Depository Limited (ECCSD), a subsidiary of the ECSE, will be responsible for the settlement of funds for this offering.

There are currently no rights of pre-emption attached to the securities.

Allotment Methodology Allotment to successful candidates begins on January 25, 2013 and will close on January 31, 2013 or on such earlier date that the issue is allotted in full, unless extended by the Government of St. Vincent and the Grenadines. If the Closing Date of the Allotment is extended, such extension shall be announced by a press release issued by the Government or on its behalf by its Agents. Shares will be allotted to subscribers in the following priority:

(i) St. Vincent and the Grenadines Nationals (individuals) (ii) St. Vincent and the Grenadines Unincorporated Entities (iii) Registered Pension Funds, Credit Unions and Cooperatives in St Vincent & the Grenadines (iv) Companies Registered in St. Vincent and the Grenadines (v) Other ECCU investors (individuals and institutions)

Subject to the prioritisation above, shares shall be allotted in a manner to ensure that each eligible applicant is allotted, at least a portion of the shares applied for. Each eligible applicant in the priority categories will have the same priority in the allotment as all other individual applicants in the same priority category.


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In the event of an oversubscription the shares will be issued in the above priority on a pro-rated basis. Further, only the first out of multiple applications by the same applicant or joint applicants will be considered. The remaining applications by the same applicant(s) will be rejected. Refunds Refunds, in respect of shares applied for but not allotted, will be made to all of the applicants concerned by their brokers within five (5) business days of the close of the allotment period. The funds will be held on a non interest bearing segregated account until the allotment process has been completed. Refunds will be made to clients in accordance with the preferred method of payment selected on the application form. Expenses Associated with the Issue Expenses associated with the issue of the shares are for such service and delivery charges as will ensure the process, administration. These expenses also include the preparation and printing of the prospectus, marketing and the registration of the shares. The total expenses estimated for this issue is EC$240,752.00. Therefore the expected net proceeds after these fees have been deducted are estimated at EC$17,039,248.00. The offerer will bear the expenses associated with the arrangement of this issue. There is no commission payable by the issuer to any person in consideration of his agreeing to subscribe for or of his procuring or agreeing to procure subscriptions for, any shares in the issuer.

These proceeds will be paid directly to the Government of Saint Vincent and the Grenadines.


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2. RISKS OF OFFERING

Investors contemplating the purchase of the shares should carefully consider the risk factors below in addition to the other information contained in this Prospectus before making an investment. The occurrence of any of the following events could adversely affect the business, financial condition and operating results as well as adversely affects the value of the registered shares. The Company is exposed to credit risk, market risk, operational risk, foreign exchange risk, liquidity risk and reputation risk. Risk Management is carried out by the Management Committee under the policies approved by the Board of Directors. Specific targets, policies and strategies in line with the ECFH Group’s vision are monitored by the Group’s Asset/ Liability Committee to ensure that the financial performance is maintained while adequately addressing risk. Future financial results may differ substantially from the historical results presented in this Prospectus. There are no guarantees that the Company will be profitable, as past performance is no assurance of future performance(s).

The Company has adopted a proactive approach to reducing its vulnerability to changes in competitive and market conditions and is continuously researching opportunities. Bank of Saint Vincent and the Grenadines Limited is committed to ensuring its risk exposures are mitigated. The risks below are ranked in order of importance. These risks constitute the greatest threats that the investment may be lost in whole or part, or may not constitute adequate returns. Credit Risk The risk that a counterparty will cause financial loss for the Company by failing to discharge an obligation. Credit risk is the most important risk for the Company’s business management and so the Company carefully manages its exposure to credit risk. This risk arising mainly due to the Company’s lending activities in the form of loans and advances and also from investing activities in the form of debt securities and other bills. There is also credit risk in off balance sheet financial instruments, such as loan commitments. The company’s risk exposure is managed by the credit risk management team of the group and reports are submitted to the Board of directors regularly. Liquidity Risk The risk stemming from the lack of marketability of the shares so that these shares cannot be bought or sold quickly enough to prevent or minimize a loss. Market Risk Market Risk refers to the risk that a security will lose value because of changes in market conditions. The evaluation of market risk depends on an understanding of how an investment will respond to a variety of changes in the level of interest rate, currency values, and other market factors. The realized value for equity securities that are sold may be more or less than the purchase price of the shares, depending on market conditions at the time of sale. Neither the Company nor the Board of Directors can warrant the performance of the Company the future, or the price at which the shares will be sold. Bank of Saint Vincent and the Grenadines cannot assure potential investors a share price in excess of the subscription price at any time after the date of the Prospectus. The shares may not trade at or above the subscription price. Economic Conditions

The operations of the Bank of Saint Vincent and the Grenadines Limited may also be affected by the performance of the St. Vincent and the Grenadines economy. Currency Exchange Risk A small portion of the Company’s revenues and expenses are generated or incurred in foreign currencies. Although the Eastern Caribbean Dollar is fixed to the United States dollar, however the ECD fluctuates against other currencies and there is no guarantee that the ECD will remained fixed to the USD. Currently the foreign exchange rate risk is minimal as the exposure is low.


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Other Key Considerations

1. Bank of Saint Vincent and the Grenadines Limited remains profitable and has maintained an increasing asset base.

2. Bank of Saint Vincent and the Grenadines Limited has strong relationships with regional and international

correspondent banks and other financial service providers. 3. The Bank is committed to being innovative and dynamic in modernising its processes in order to increase its

operating and cost efficiency levels.

4. The Bank is supported by the strength of its Parent Company ECFH, which is the majority shareholder and has strong brand recognition regionally.

5. There are no major investments in progress outside of regular banking business activity.

Legal or Arbitration Proceedings BOSVG is not currently involved in any legal or arbitration proceedings. Directors’ Service Contracts There are no service contracts between any Directors and BOSVG. Directors’ Holdings of the Share Capital of the Issuer Mr Derry Williams owns 3,650 shares in BOSVG. Directors Contracts There are currently no contracts or arrangements existing at the date of the prospectus in which a director of the BOSVG or it’s subsidiary is materially interested.


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3. DIRECTORS Profile of Board of Directors Errol Allen Profession : Economist Qualification : MSc. International Economics Substantive Position: Consultant (Chairman of the Board) Board Member since: November 2010 Appointed by : ECFH Nationality : Vincentian Functions : Chairman of the Executive Committee and the Audit Committee

Other Directorships: President of the Eastern Caribbean Institute of Banking and Financial Services, Chairman of

the Caribbean Association of Banking and Financial Institutes, Chairman of the Eastern Caribbean Securities Regulatory Commissions and Chairman of the Turks & Caicos Island Regulatory Commission. Business Experience within the last five years: Retired, Deputy Governor of the Eastern Caribbean Central Bank where he served from 1983 – 2005.

Andre Iton Profession : Financial Consultant Qualification : B.Sc. Economics; A.C.A Substantive Position: Director Board Member since: November 2010 Appointed by : ECFH Nationality : Vincentian Other Directorships: None. Business Experience within the last five years: Retired. Chairman of Cayman Islands Development Bank GT, GCM Chairman 2002 – 2005. Evelyn Jackson Profession : Retired Civil Servant Substantive Position: Consultant (Chair Audit Committee) Board Member since: November 2010 Appointed by : Government of St. Vincent & the Grenadines Nationality : Vincentian Function : Member of the Audit Executive Committee Directorships: Public Service Commission Board Business Experience within the last five years: Member, Public Service Commission Board, Manager St. Vincent Building & Loan Association Judith Veira Profession : Consulting Actuary Qualification : BA Hons Actuarial Science; Fellow of the Society of Actuaries Substantive Position: Senior Partner Board Member since: November 2010 Appointed by : Government of St. Vincent & the Grenadines Nationality : Vincentian Functions: Member of the Executive Committee, Audit Committee and the Human Resource Committee Other Directorships: Director, SVG Publishers Inc. Business Experience within the last five years: 1997 – Present: Consulting Actuary for Private & Statutory Corporation for St. Vincent, British Virgin Islands, St. Lucia and Trinidad Chairman, SVG Postal Corporation), 2009-Present: Director, SVG Publishers Inc.


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Godwin Daniel Profession : Agricultural Economist Qualification : M.Sc. Agricultural Economics Substantive Position: Retired Board Member since: November 2010 Appointed by : Government of St. Vincent & the Grenadines Nationality : Vincentian Functions : Member of the Executive Committee and Audit Committee Business Experience : Coordinator of Inter-American Institute for Cooperation on Agriculture (IICA) Other Directorships: Director – National Properties Limited (2007 – 2010) Business Experience within the last five years: 1996-Present - Chairman – National Irrigation Authority, 2007-Present -Chairman – Vincy Fresh Victor Eudoxie Profession : Retired Banker Substantive Position: Consultant Board Member since: November 2010 Appointed by : ECFH Nationality : Saint Lucian Functions : Member of the Human Resources Committee Business Experience : Retired. Other Directorships: Chairman, East Caribbean Financial Holding Company Limited Business Experience within the last five years 2000-Present: Appointed Chairman, East Caribbean Financial Holdings Ltd 2010-Present - Appointed Director – Bank of St. Vincent and the Grenadines Ltd Robert Norstrom Profession : Banker Qualification : Associate & Fellow – Chartered Institute of Bankers, (UK) Substantive Position: Group Managing Director, ECFH Board Member since: November 2010 Appointed by : ECFH Nationality : Saint Lucian Business Experience : Group Managing Director, East Caribbean Financial Holding Company Limited (2004- present) Other Directorships: Board Member, East Caribbean Financial Holdings Limited and Board Member Eastern Caribbean Amalgamated Bank Derry Williams Profession : Banker Qualification : MBA Finance Substantive Position: Managing Director, BOSVG Board Member since: April 2011 Nationality : Vincentian Appointed : April 2011 Business Experience : Deputy CEO NCB (SVG) Ltd. Other Directorships: Board Member, Eastern Caribbean Amalgamated Bank (ECAB) Business Experience within the last five years 2000-Present: February 2005 – March 2011 Deputy Chief Executive Officer – Bank of St. Vincent and the Grenadines Ltd. April 2011 – Present Managing Director – Bank of St. Vincent and the Grenadines Ltd.


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4. SENIOR MANAGEMENT

Derry Williams Managing Director February 2005 – March 2011: Deputy Chief Executive Officer – Bank Of St. Vincent and the Grenadines

Ltd. April 2011 – Present: Managing Director – Bank Of St. Vincent and the Grenadines Ltd. Bernard Hamilton Manager Credit Administration February 2005 – Present: Manager Credit Administration – Bank Of St.Vincent and the Grenadines

Ltd. Bennie Stapleton Chief Financial Officer August 2009 – Present: Chief Financial Officer – Bank of St. Vincent and the Grenadines Ltd. Wendell Davis Manager Information Technology August 2005 – Present: Manager Information Systems – Bank Of St. Vincent And The Grenadines

Ltd. Charron Dossantos Senior Human February 2005 – August 2010: Human Resource Officer – Bank of St. Vincent and the Grenadines Ltd. September 2010 – Present: Senior HR Officer - Bank of St.Vincent And The Grenadines Ltd. Nandi Williams Corporate Secretary December 2004 – Present: Corporate Secretary – Bank Of St. Vincent and the Grenadines Ltd. La Fleur Hall Manager Compliance March 2010 – Feb 2011: Senior Audit Officer – Bank of St. Vincent And The Grenadines Ltd. February 2011 – Present: Senior Compliance Officer (Now Manager Compliance) – Bank of St.

Vincent And the Grenadines Ltd. Cerlian Russell Manager Operations July 2005 – March 2010: Senior Lending Officer – Bank of St. Vincent and the Grenadines Ltd. March 2010 –Present: Operations Manager – Bank of St. Vincent and The Grenadines Irvia Haynes Senior Audit Officer Nov 2005 – Present: Senior Audit Officer – Bank of St. Vincent and the Grenadines Ltd.


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5. OVERVIEW OF COMPANY Bank of St. Vincent and the Grenadines Ltd (BOSVG), formerly the National Commercial Bank (SVG) Limited, was incorporated on June 1, 1977 in St. Vincent and the Grenadines and was wholly owned by the Government of St Vincent and the Grenadines. BOSVG is now a subsidiary of the East Caribbean Financial Holdings Limited (ECFH), a holding company incorporated in St Lucia. On November 1, 2010, ECFH acquired 51% of BOSVG’s shares from the Government of St Vincent and the Grenadines. The remaining of BOSVG shares are held by; the Government of St Vincent and the Grenadines – 40%, the staff of BOSVG – 0.90% and NIS St. Vincent and the Grenadines – 8.10%. Upon the acquisition by ECFH the financial year end was changed from June 30 to December 31 for consistency with Parent Company’s financial year end. Since its inception BOSVG has engaged in commercial banking activities in St Vincent and the Grenadines. BOSVG acquired the Government of St Vincent and the Grenadines savings and loan operations. On June 19, 2009 BOSVG acquired and amalgamated with the St Vincent and the Grenadines Development Bank. Between June 1, 1977 and present, BOSVG developed a multi-branch banking network of branches throughout St Vincent and the Grenadines with branches in Kingstown, Bequia, Canouan, Union Island, Georgetown, and Barrouallie. BOSVG provides a full menu of commercial banking services, including depository, commercial lending; mortgage financing; foreign exchange trading, including bills settlements using its network of correspondent banks; credit and debit cards, wealth management and brokerage services, and convenience banking through its network of Automated Teller Machines (ATM), to both public and private sector clients. The Property Holdings SVG Ltd was incorporated on December 13, 2010 to protect and preserve the property assets of the bank by ensuring that all building services and maintenance needs of the bank are met and that all properties continue to command market value. It also explorers business opportunities for property development, by entering into arrangements with other key stakeholders in order to generate an additional income stream for the bank and to facilitate the temporary acquisition of distressed properties for future investment. As of December 31, 2011, BOSVG managed assets, and had an equity base of EC$698M and $91M respectively. BOSVG’s deposits for December 2011 to June 2007 averaged EC$627M. On the other hand, BOSVG’s loans and advances for the same period averaged EC$525M. BOSVG is the only local indigenous commercial bank in St Vincent and the Grenadines. BOSVG has distinguished itself as an excellent corporate citizen. The Bank was the recipient of the Eastern Caribbean Central Bank (ECCB) Good Corporate Citizen Award for Sports in 2001 and 2002 and the same award for Social Services in 2003. In the area of Educational Development the Bank has awarded scholarships valued over ECD $4 million. Over the years a significant number of organizations and individuals have benefited from the Bank’s contribution to national development projects and personal needs. BOSVG now boasts assets in excess of ECD$698 million (USD $259million). Overview of parent Company – East Caribbean Financial Holding Company Limited THE BEGINNING In 1980, after more than 150 years of banking in Saint Lucia, it was clear the needs of certain segments of the market had not been satisfied. In particular, lower income families and local businessmen did not have ready access to credit. As a result, the Government of Saint Lucia saw it necessary to establish both a commercial and a development bank. The Government devised a clear strategy to enter the market as a competitor, to gain a share of the lucrative banking business. Profits generated as a result would be used to benefit the country. Accordingly, the Government established the National Commercial Bank of Saint Lucia Limited (NCB) and the Saint Lucia Development Bank (SLDB), as the first banks to be wholly owned by the Government and people of Saint Lucia. The National Commercial Bank of Saint Lucia Limited was incorporated as a Limited Liability Company on October 10, 1980 and on January 5, 1981; NCB opened its doors to serve the public. On February 25, 1981, the Saint Lucia Development Bank took over the operations of the Housing Development Bank, the Agricultural and Industrial Bank and the lending functions of the National Development Corporation and a Student Loans portfolio.


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THE CREATION OF ECFH In January 2001 the shareholders of Saint Lucia’s two leading financial institutions the National Commercial Bank and the Saint Lucia Development Bank agreed to a merger which gave birth to the East Caribbean Financial Holding Company Limited (ECFH) on July 1, 2001. In October 2001, ECFH and the Bank of Nevis became the first companies to be listed on the Eastern Caribbean Stock Exchange. Currently, in excess of 13.1 million shares are recorded as issued and outstanding for ECFH. Saint Lucia embarked upon a new era in financial services, as ECFH became the island’s first full-fledged financial services provider. THE ECFH GROUP The ECFH Group is governed by a Board of Directors comprising individuals from the OECS and Caricom, representing a balanced mix of competencies and wide experience in business, financial services, the legal environment and other sectors. The Group has grown to become the largest indigenous financial institution in Saint Lucia. The Group comprises seven subsidiaries: 1. Bank of Saint Lucia Limited 2. Bank of Saint Lucia International Limited 3. ECFH Global Investment Solutions Limited 4. EC Global Insurance Company Limited 5. Property Holding & Development Company of Saint Lucia Limited 6. Bank of St Vincent & the Grenadines Limited 7. Mortgage and Finance Company Limited

6. FIVE YEAR PERFORMANCE ANALYSIS The market in which BOSVG operates is largely defined by the geographic space of St Vincent and the Grenadines. BOSVG also serves many Vincentians living in North America and the United Kingdom. The Bank has been ranked according to deposits, as the largest commercial bank in St Vincent and the Grenadines. With respect to the financial performance during the past year, the bank recorded profit before tax of $5.2million compared to $6.6 million in the six (6) months ended December 2010. During 2011 some expenses were incurred, mainly relating to the rebranding and the occupancy of the new headquarters, which will not recur in future periods. All other items performed in accordance with the budget expectations for the year. In the period under review the local deposit market has ranged between $1.406 and 1.529 billion. During the same period the performance of the local deposit market has been mixed. Between June 2008 and March 2011, while the local deposit market increased by 4.39%, it has recorded six quarters of decline. Public sector deposits, which comprise central Government and Statutory bodies, declined by 25.11% to $198.4 million and represents 12.98% of total deposits. Further, Central Government’s deposits declined eight quarters, which included declines in three consecutive quarters on two occasions. Private individuals’ deposits, while it recorded six quarters of decline, ranged from 48.64% to 52.2% of total deposits. The recorded declines in private individuals’ deposits peaked in the December 2010 quarter at 0.57%. Between June 2008 and March 2011, private individuals’ deposits increased by 6.1%. On the other hand, business firms’ deposits, which increased by 17.93% between June 2008 and March 2011, ranged between 11.62% and 14.5% of total deposits, and recorded four quarters of decline. Private individuals and business firms together represent 63.94% of the total deposits in St Vincent and the Grenadines. Between March 2009 and 2011, loans and advances declined in four quarters and declined overall by 7.47% to $1.156 billion. During the quarter ended December 2010, loans and advances declined by 6.52%, which was mainly due to 43.15%, 45.58% and 32.87% declines in Government Services, Transport, and Financial Institutions loans and advances respectively. In fact, advances to Government services declined by $63.134 million. The proportion of Government services to the loans and advances portfolio declined from 18.31% at the end of March 2009 to 8.25% at March 2011. The decline in Government Services loans and advances is mainly due to the Government’s draw down on a loan facility of $100 million from the Caribbean Development Bank which was used to refinance its borrowings with commercial banks.


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During the period March 2009 to March 2011, Personal loans and advances continued to be the most dominant segment of the loans and advances market and ranged between 47.83% and 55.76% of total loans & advances. Property construction and renovation form the second largest segment, ranging from 19.41% to 22.49%, of the loans and advances market. It is worthy to note that agriculture and fisheries, while among the smallest sectors, continue to play a diminishing role in the loans and advances market. During the period March 2009 to 2011, most segments of the loans and advances market were either flat or contracted, while clothing and accessories, tourism, professional services, financial institutions grew on average by 11.97%, 9.09%, 4.08% and 14.42% respectively. The contractions were in the fisheries, transport, Government services and agriculture with average declines of 16.28%, 9.09%, 8.8%, and 5.87% respectively. Interest Income Interest income increased steadily from EC$49M in 2007 to EC$51M in 2009 and began to decline thereafter to a low of EC$24M in December 2010 at the height of the financial crisis. Interest income recovered in 2011 (EC$44M) closing above the five year (2007 -2011), average of EC$43M. Net Income There were large fluctuations in net income over the past five years. There was a steep decline from the average net income of EC$15M during 2007 and 2008 to an average of EC$2M in 2009 and 2010. There were signs of recovery in the most recent years closing at EC$5M in 2011. Over the last five years there has been a net income decrease of EC$9M. This significant reduction in income can be attributed to the effects of the economic difficulties experienced throughout the World which directly impacted the following:

• Impairments of loans and advances • Investment impairments

This decline resulted in a declining Return on Assets from 2% in 2007 to a low of 0.14% in 2008 and closing at 0.71% in 2011. Delinquent loans and advances of EC$10M were provided for in 2009. However in 2010 these loans were then repaid and this repayment reflected in the 2010 financials. Balance Sheet The total assets stood at EC$698M in December 2011. Total assets rose sharply from 2008 to 2009 but fell subsequently on the sale of investment property. Total assets declined as the economic challenges deepened. Specific emphasis was placed on stabilizing and improving the overall asset quality, which was achieved to a large extent. Over the last five (5) years liabilities have averaged 88% of the Bank’s assets. Competitors BOSVG’s market competitors are classified into four operating groups. They are:

1. Commercial Banks 2. Credit Institutions 3. Credit Unions 4. Building & Loan Association

All market participants compete for deposit funds and the mortgage and personal lending market segments. Currently, only the commercial banks are subject to regulations and oversight by the Central Bank. The Credit Institutions, though subject to the oversight of the Central Bank, are not subject to the same regulatory requirements as the commercial banks. The Credit Institutions are not subject to the reserve requirements as do


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commercial banks. Also, the initial capitalization threshold for credit institutions is less onerous than that of commercial banks The Credit Unions, while they have become dominant players in the financial services sector, are not subject to any regulation of the Central Bank. There are four commercial banks operating in St Vincent and the Grenadines. They are: 1. Bank of St Vincent and the Grenadines (BOSVG) 2. CIBC FirstCaribbean International Bank (Barbados) Limited (CIBCFCIB) 3. Bank of Nova Scotia (BNS) 4. RBTT Bank Caribbean Limited (RBTT) The three competitors of BOSVG are branch operations of Canada’s three largest banks, namely Canadian Imperial Bank of Commerce (CIBC), Royal Bank of Canada (RBC) and Bank of Nova Scotia (BNS). Consequently, each of the competing commercial banks have access to the resources, including capital, technology, and correspondent relationships, of their parent company. Further, CIBC First Caribbean through its legacy Barclays operations is the oldest commercial bank operating in St Vincent and the Grenadines. Interestingly, BOSVG is the last market entrant of the four commercial banks. As at December 2011, the combined asset base of the four commercial banks in St. Vincent and the Grenadines was $1.9 billion The BOSVG’s competitors that are categorized as Credit Institutions are as follows: 1. The St Vincent Co-operative Bank Limited 2. First St Vincent Bank Limited The First St Vincent Bank Limited is a relatively small operation with an asset base of$20M. The St Vincent Co-operative Bank Limited commands a respectable segment of the deposit and mortgage markets. Its asset base as at December 2010 was $136M. Both of these institutions have been operating in the market in excess of 50 years and have considerable goodwill. The main Credit Unions comprise: 1. General Employees Co-operative Credit Union Limited 2. Kingstown Co-operative Credit Union Limited 3. St. Vincent Union of Teachers Co-operative Credit Union Limited Over the years the credit unions have been actively involved in issuing personal loans to its members. During the last decade, credit unions have been granted permission to make mortgages to its members. Although to date the credit unions have not been dominant participants in the mortgage market, they are well positioned to do so given that they have already made substantial investments in investment properties targeted for residential construction, to participate in the residential mortgage market as vendor and lender. The main Credit Unions have an asset base as of December 31, 2010 of $277M. The St Vincent Building & Loan Association (SVBLA) has been the longest active participant in the residential mortgage market. Also, the SVBLA is a notable competitor in the deposit market. The company’s asset base as at December 31, 2010 stood at $246M.


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Regulatory Environment Bank of Saint Vincent and the Grenadines is required to operate under the following requirements and limitations:

• A minimum requirement capital of EC$5M • A reserve fund must be maintained – when the amount of the reserve is less than 100% of paid up capital

an amount not less than 20% of profits must be transferred to the reserve until the reserve and the capital are the same.

• BOSVG must maintain paid-up capital and reserves at not less than 5% of liabilities. • The company is restricted from carrying on any business prohibited by the Banking.

Corporate Social Responsibility During 2011, BOSVG advanced support for the communities through its corporate social responsibility activities. A significant donation was made to the health sector with the joint acquisition of a CT Scan machine for the Milton Cato Memorial Hospital in Kingstown. Substantial disaster relief was also provided to the persons in the north of the country that were affected by the storms in April 2011. BOSVG also continued to support the other critical sectors such as youth and sports; culture and education. In the years ahead, the plan is to advance the relevant policies and programmes and the supporting framework that will ensure that the bank continues to satisfy its corporate social responsibility mandate. Significant Recent Developments For 9 months ended September 30, 2012, demand for loans increased by about 12%, interest income also increased by 6%, investment income reduced by about 21% due to liquidity tightening and limited opportunities. Staff and operating cost has contracted during this period. There has been a marked increase in the commissions and fees attributed to the launch of a new debit card as well as an increase in the number of merchants who use the bank’s services. The increase in net income is largely attributed to the sale of repossessed properties and the growth of the loan portfolio. 7. OVERVIEW OF RECENT STRATEGIC INTITATIVES & DEVELOPMENTS

The BOSVG’s Board of Directors and management team, together with its parent company, East Caribbean Financial Holdings Ltd, have carefully developed a strategic plan which aims at sustainable growth in the key business segments while providing its shareholders with consistently better than average market returns on their investment. The strategic plan is premised on the intent of the Bank to facilitate the seamless and efficient transfer of financial resources in a manner that actively supports sustainable development, particularly in the productive sectors of St. Vincent and the Grenadines. More specifically, BOSVG’s strategic plan focuses on the following overriding goals: 1. The rebranding of the Bank resulting in the launch of the new brand identity inclusive of a modern and

sophisticated logo. The rebranding was supported by targeted marketing and public relations initiatives aimed at deepening existing loyalty and creating new loyalty within the market place.

2. The opening of the Bank's new headquarters at Reigate, Kingstown on November 13, 2011. This new building, which was designed to provide greater comfort and convenience for customers and staff, is expected to contribute immensely to the general improvement in customer service and overall satisfaction in the years ahead.

3. Responding to the needs of the business sector thereby expanding its clientele base.

4. Aggressively expanding its retail business through the provision of innovative banking products and services at competitive rates;

5. Advance the repositioning of the bank with renewed focus on high quality customer service;


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6. Strengthening the governance and risk management structures to provide greater assurance of soundness and stability;

7. BOSVG has commenced the relevant training and change management programmes geared at achieving and maintaining alignment with the core values of the ECFH.

8. Building sustainable linkages with the communities. 8. SHAREHOLDER PROFILE

The current shareholders of BOSVG are the following: Shareholder No. of shares Share in % East Caribbean Financial Holding Limited 5,100,000 51% Government of Saint Vincent and the Grenadines 4,000,000 40% National Insurance Scheme of Saint Vincent and the Grenadines 806,590 8.1% Staff of the Bank of Saint Vincent and the Grenadines 93,410 0.9% Total 100%

9. DIVIDEND POLICY The Company’s policy regarding the payment of dividends will conform to the provisions of the Companies Act of St Vincent and the Grenadines and Banking Act of St Vincent and the Grenadines in all respects. One such provision in the Banking Act of St Vincent and the Grenadines states that no dividend shall be declared, credited or paid from profits if such declaration, credit or payment would result in an impairment of the capital requirements under the Banking Act of St Vincent and the Grenadines. Bank of Saint Vincent and the Grenadines plans to declare and pay dividends to the holders of ordinary shares each year. The amount of any dividends so declared will be determined after reviewing the Company’s cash flows, earnings, financial position, debt retirement obligations if any, and other factors including the need to provide for growth and reserves as determined by the Board of Directors. In April 2012, the Board of Directors approved a policy to retain 50% of the net profits in a general reserve for future expansion and growth as well as enhancement of the Tier 1 capital of the Bank. The other 50% of net profits will be distributed to shareholders as dividends. The policy took effect from the 2012 financial year. This retention and dividend policy took effect in 2012. The policy is subject to review from time to time by the Board of Directors. The Company has paid dividends on three occasions during the last five years; the details of these payments are below:

Dividend History ($’000)

2012 2011 2010 2009 2008 2007

Total Dividends Paid 2,000 1,600 - 3,000 - -

Dividend per Share 0.20 0.16 - 0.3 - -


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10. ECONOMY OVERVIEW An International Monetary Fund (IMF) mission led by Ms. Nita Thacker visited St. Vincent and the Grenadines during 2011 for the annual Article IV discussions on economic developments and macroeconomic policies. At the end of the mission, Ms. Thacker issued the following statement: “St. Vincent and the Grenadines has been facing a challenging year. In addition to the continued impact of the global slowdown, the country was severely affected by two recent natural disasters: Hurricane Tomas in October 2010, and torrential rains and floods in April 2011. Economic activity contracted by 1.8 percent last year, and is expected to remain subdued this year despite some pickup in reconstruction activity. Growth is expected to recover in 2012 and reach its potential level of 3.5 percent over the medium-term, provided recovery in advanced economies does not stall. High world commodity prices are expected to put temporary pressure on inflation and the balance of payments in 2011, but these will subside over the medium-term. With respect to the financial sector, continued close monitoring and decisive action to ensure that all financial institutions meet the prudential requirements will be key to safeguarding the stability of this sector. In this context, the mission emphasized the importance of setting up the planned Single Regulatory Unit to strengthen financial sector supervision.”

The Eastern Caribbean Central Bank review for 2010 gives an overview of the projections for the St. Vincent and the Grenadines economy. “Amidst improvements in the global economy and the expectations for the US economy in particular, economic activity in St Vincent and the Grenadines is projected to pick up in 2011. Activity in the construction sector, one of the main drivers of economic growth, is projected to gain momentum as rebuilding continues in the aftermath of hurricane Tomas. Also, the 2011 budget outlines a number of public sector projects, including the international airport’s main terminal building, fire and rescue station and other landside facilities, which are expected to add robustness to construction activity. Although the high rate of unemployment in the advanced economies is likely to keep travel demand in these markets subdued, the recovery in the US economy, though modest, is expected to positively impact visitor arrivals to St Vincent and the Grenadines. The performance in the cruise subsector is projected to improve in 2011, with spillover effects in the transport, storage and communication sector, as more taxi operators are hired for site seeing and fun tours. In the other sectors, activity in manufacturing and wholesale and retail trade is projected to increase in 2011, associated with the anticipated improvement in economic activity. Growth in agricultural output is not likely as crops, especially bananas and plantains, which were replanted after the hurricane, are not expected to be ready for harvest before the second half of the year. The central government’s fiscal operations are expected to yield a larger overall deficit as current expenditure is projected to increase. The outlook is for larger outlays on transfers and subsidies as the social safety net programmes are expanded to accommodate hurricane Tomas victims. Additionally, growth in the wage bill is anticipated based on a negotiated 4.0 per cent salary increase for 2011. Higher interest payments are projected as the outstanding debt increases. Capital expenditure is also forecast to be above the 2010 level, as a result of the number of planned projects for this year. In the external sector, the overall balance of payments surplus is likely to contract, associated with an increase in the current account deficit. The wider deficit is anticipated primarily as a result of larger import payments due to higher food prices and for building materials for the continued reconstruction and rehabilitation in the aftermath of hurricane Tomas. Gross inflows from travel are however expected to be above the level of 2010, the consequence of an improved performance in the tourism industry. There are several risks surrounding these projections. While the global economy is recovering from the international economic and financial crisis, some vulnerability remains in the financial sector. Labour market issues in the advanced economies have the potential to adversely affect foreign direct investments and remittance flows. Other factors, which may pose risks to economic recovery in St Vincent and the Grenadines, include increasing international oil and food prices and adverse weather conditions.”


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11. MONEY LAUNDERING POLICY

The Bank’s and it’s Directors’ code of conduct does not support any kind of Money Laundering activities. The Bank abides with local and international Anti-Money Laundering rules and regulations.

12. MATERIAL CHANGES REPORTING Bank of St. Vincent and the Grenadines Limited shall inform its shareholders’ by press releases within seven (7) days following a material change in business. A “material change” is a matter which is likely to affect a shareholder’s decision to sell or purchase shares or which is likely to affect the price of shares.

13. MATERIAL LITIGATION There are no material, pending or threatened claims, and legal or arbitration proceedings against the Company or any of its directors or properties that may have a significant effect on the Company’s financial position.

14. MATERIAL CONTRACTS There are currently no material contracts to report.

15. MATERIAL INTEREST One director owns shares in the Company.

16. MATERIAL RELATIONSHIPS

Bank of St. Vincent and the Grenadines Limited is not aware that any family relationships exist between any Director and any other person who performs an important administrative, management or supervisory function.

17. DIRECTOR RENUMERATION

Aggregate Remuneration Paid Aggregate Remuneration Payable

2011 177,600 0

2012 162,800 14,800 During the same periods, there were no benefits in kind granted to the Directors.

18. DISCLOSURE OF CONFLICTS OR POTENTIONAL CONFLICTS OF INTEREST Like Bank of Saint Vincent and the Grenadines Limited, ECFH Global Investment Solutions Limited is also a subsidiary of the East Caribbean Financial Holding Company Limited (ECFH). As the Lead Broker for this IPO, ECFH Global Investment Solutions Limited recognized the potential conflict of interest, and therefore recommended that the Ministry of Finance and Economic Planning engage an independent firm to undertake the company valuation report to be used for the BOSVG shares. Bank of Saint Vincent and the Grenadines Ltd, as a licensed ECSE-member broker dealer, will be accepting subscriptions in the IPO.


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19. DOCUMENTS AVAILABLE FOR INSPECTION

The following documents are available for inspection between 9.00 am and 3.00 pm from December 27, 2012 at the offices of each broker and, the Head Office of Bank of Saint Vincent and the Grenadines Limited and its branches

i. Incorporation documents ii. Articles of Amalgamation iii. Articles of Association of Amalgamation iv. Bank of Saint Vincent and the Grenadines Limited audited financial statements for the year ended

December 31 2011 and June 30, 2011 v. Valuation Report vi. Terms and Agreement of the divestments vii. Shareholder Agreement of November 1, 2010


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20. PERFORMANCE FIGURES – BANK OF SAINT VINCENT AND THE GRENADINES LIMITED (BOSVG) & ECFH FINANCIAL HIGHLIGHTS

AUDITED HISTORICAL – BOSVG Balance Sheet, Statements of Income & Comprehensive Income and Cash Flows

Statements of Income & Comprehensive Income 2006 - 2011

SEPT 30 DEC 311 YEAR ENDED JUN 301

UNAUDITED 2012

6 MTHS ENDED

2010

Year

ended 2011

20102 2010 2009 2008 2007

$000’s $000’s $000’s $000’s $000’s $000’s $000’s $000’s Interest Income 34,057 44,466 23,729 51,917 44,380 51,011 47,042 49,005 Interest Expense (15,081) (20,505) (10,379) (22,709) (22,709) (22,914) (19,434) (18,187) Net Interest Income 18,976 23,961 13,350 29,208 21,671 28,097 27,608 30,818 Other Operating Income - - - 17,927 19,764 19,173 10,486 Impairment of Investment Securities (278) (1,748) - (10,574) (10,231) (1,620) - 852 Write-off Interest Receivable - - - (343) - - - Dividend Income 114 58 113 299 - - - - Net Foreign Exchange Trading Income

3,181 3,947 2,365 5,750 - - - -

Other Gains 136 - 4,451 - - - - - Recoveries/ (Losses) on Loans and Advances, Net 1,578 3,573 (2,037) 896 896 (10,666) (193) 1,332 Operating Expenses (21,179) (28,751) (13,596) (29,105) (28,489) (29,711) (25,587) (23,062) Commissions and Fees 4,349 4,149 1,963 4,341 616 466 315 287

Loss/ Gain on Disposal of Property, Plant and Equipment - - - - - 23 25 12 Profit before Income Tax 6,877 5,189 6,609 - 815 5,421 20,711 18,423

(Provision)/ Credit for Income Tax

- (263) (838) 2,495 2,495 (4,312) (4,891) (4,203)

Profit for the Period 6,877 4,926 5,771 3,310 3,310 1,109 15,820 14,220 Unrealised (loss)/ gain on Investment Securities - 114 - (296) (296) (1,398) - - Realise gain on available for sale - - (4,452) - - - - - Total Comprehensive Income for the Period 6,877 5,040 1,319 3,014 3,014 (289) 15,820 14,220 Earnings per Share 0.69 0.49 0.58 0.33 0.08 0.21 3.16 2.84

Notes: 1) Our financial statements as at and for the year ended December 31, 2011 and as at and for the six month period ended

December 31, 2010 was audited by PricewaterhouseCoopers and by BDO as at and for the years ended June 30, 2010, 2009, 2008 and 2007.

2) As at and for the period ended December 31, 2010 we restated our comparative balances of June 30, 2010 in the financial statements for presentation purposes to be consistent with disclosure requirements based on their nature. See note 35 to the December 31, 2010 financial statements for description of the restatement. The information for 2009 and prior have not given effect to this restatement and is therefore not necessarily comparable to the 2010 and 2011 financial information.


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Balance Sheet 2007 - 2011

AS AT SEPT AS AT DEC311 AS AT JUN 301

2012 2011 2010 20102

2010 2009 2008 2007

$000’s $000’s $000’s $000's $000's $000’s $000’s $000’s ASSETS

Cash and Balance with Central Bank 45,406 45,048 124,148 44,682 97,818 101,682 76,991 81,902 Treasury Bills 4,574 4,644 7,422 7,255 - - - -

Deposits with Other Banks 38,256 26,610 51,080 31,407 - - - - Financial Assets Held for Trading 40 40 42 1,555 8,810 22,868 13,896 28,199 Loans and Advances to Customers 509,291 454,709 401,538 482,005 477,884 569,256 548,899 437,803 Bonds 10,220 10,515 27,089 28,099 - - - - Investment Securities - Held-to- Maturity 73,025 78,029 61,303 94,723 107,903 89,677 86,368 94,034 Available for Sale 4,105 4,031 4,043 11,543 - - - - Pledged Assets - - 1,259 8,636 8,367 9,378 7,884 - Customers’ Liability Under Acceptances - - - - 1,038 2,365 1,601 1,314 Property, Plant and Equipment 59,650 57,437 25,893 6,342 6,342 5,766 5,172 4,070 Investment Property 3,807 3,809 - 37,000 - - - - Other Assets 7,273 7,585 3,993 5,653 56,720 12,257 14,434 10,385 Income Tax Recoverable 3,573 3,572 3,834 3,744 - - - -

Deferred Tax Asset 2,009 2,009 2,011 2,393 - - - - Total Assets 761,229 698,038 713,655 765,037 764,882 813,249 755,245 657,707

LIABILITIES Deposits from Banks 43,708 17,082 27,316 33,095 33,095 28,590 24,257 34,005 Acceptances, Guarantees and Letters of Credit (per contra) - - - - 1,038 2,365 1,601 1,314 Due to Customers 584,121 543,855 557,629 591,342 589,360 645,572 598,084 516,869

Other Funding Instruments - - 1,245 8,367 8,367 9,378 7,884 - Borrowed Funds 28,577 30,181 30,699 31,893 - - - - Subordinated Debts - - - - 31,736 30,418 23,749 23,402 Other Liabilities 10,029 15,518 10,404 15,296 16,242 14,896 15,857 16,019 Total Liabilities 666,435 606,636 627,293 679,993 679,838 731,219 671,432 591,609 Equity Share Capital 14,753 14,753 14,753 14,753 14,753 14,753 14,000 14,000 Reserves 14,753 14,753 14,753 14,753 20,891 21,187 21,832 19,937 Unrealised Gains on Investments 1,915 1,800 1,686 6,138 - - - - Retained Earnings 63,373 60,096 55,170 49,400 49,400 46,090 47,981 32,161 Total Equity 94,794 91,402 86,362 85,044 85,044 82,030 83,813 66,098 Total Liabilities and Equity 761,229 698,038 713,655 765,037 764,882 813,249 755,245 657,707





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Statement of Cash Flows 2007 - 2011

SEPT 30 DEC 311 YEAR ENDEDJUN 301 9 MTHS

ENDED 2012

YEAR ENDED

2011

6 MTHS ENDED

2010

20102 2010 2009 2008 2007

$000’S $000’s $000’s $000’s $000's $000’s $000’s $000’s Operating Activities Profit before income tax 6,878 5,189 6,608 815 815 5,421 20,711 18,423 Adjustments for Interest Income (34,057) (44,466) (23,729) (51,917) - - - - Interest Expense 15,081 20,505 10,379 22,709 - - - - Dividend income - - - (299) (529) (665) (574) Impairment on investment securities 279 1,748 - - 10,231 1,620 - 852 Impairment losses on loans and advances 701 (746) 3,856 8,909 (4,416) 10,761 (1,536) (1,123) Depreciation and amortization 1,322 1,915 1,046 1,391 1,391 1,494 1,169 1,138 Translated exchange gain (3,181) (3,947) (2,365) (5,750) - - - - Fair Value Gains (4,452) (296) - - - - Realised gain on investment securities - - - - (1,417) (785) - Gain/ loss on disposal of property, plant and equipment

- (9) - - (23) (25) 12

Cash flows before Changes in Operating Assets and Liabilities (12,977) (19,802) (8,666) (24,139) 7,722 17,327 18,869 18,728 Decrease /(Increase) in mandatory deposits with Central Bank (3,730) 4,635 (161) (5,705) - - - - (Increase) /Decrease in loans and advances to customers (53,403) (54,127) 78,516 80,761 95,788

(31,118)

(109,560) (44,404)

(Increase) /Decrease in other assets 315 (1,476) (458) (33,929) (948) 2,289 (4,834) 2,655 Redemption of Treasury Bills 2,903 - - - - - - Purchase of Treasury Bills - (4,602) - - - - - Redemption of investment securities 4.462 32,268 45,248 - - - - - Purchase of Investment Securities (32,971) (6,443) - - - - - Decrease due to customers 46,647 (11,109) (33,510) (50,330) - - - - Decrease in deposits from banks 26,626 (10,233) (5,779) 4,504 - - - - Decrease in other funding instruments (1,245) (7,121) (742)

(Decrease)/ increase in deposits - - - (51,70

7) 51,821 71,467 30,215 Increase/ (Decrease) in other liabilities (5,487) 5,113 (4,891) (122) (890) (880) 490 5,674 Net Cash (Used In)/ Generated from Operations (953) (86,044) 52,133 (29,702) 49,965 39,439 (23,568) 12,868 Interest Received 34,248 42,845 27,302 48,764 - - - - Interest Paid (16,288) (19,241) (8,233) (22,801) - - - - Income taxes paid - (546) (1,457) (1,457) (4,505) (4,758) (708) Net Cash (Used In) /Generated From Operating Activities 17,006 (62,440) 70,656 (5,196) 48,508 34,934 (28,326) 12,160 Cash flows from Investing Activities Decrease in pledge assets 1,271 7,122 741 - - - - (Purchase) / Disposal of investment property 2 (3,809) 37,000 (43,960) - - - - Purchase of treasury Bill - - 16,115 - - - - Dividends received - - - 299 529 665 574 Additions to plant property and equipment (3,536) (3,458) (20,598) (1,966) (1,967) (2,090) (2,271) (1,963) Proceeds from liquidation of securities 298 - - - 63,419 46,613 65,800 61,017

Securities acquired - - - - (92,49

9) (44,54

5) (41,246) (69,496)

Net movement in securities held for trading - - - - 14,058 (15,95

0) 95 15,037 Proceeds from disposal of property, plant and equipment - - 9 - - 25 25 -

Additions to investment properties - - - - (37,00

0) - - - Net Cash (Used in)/ Generated from Investing Activities (3,533) (35,996) 23,533 (29,070)

(53,690)

(15,418) 23,068 5,169


23

30-Sep

DECEMBER 311

JUNE 301

9 MTH YEAR ENDED

6 MTH ENDED

ENDED 2011 2010

2012

20102 2010 2009 2008 2007

$000’s $000’s $000’s $000's $000's $000’s $000’s $000’s

Financing Activities

Dividends paid -3,600 - - - - -3,000 - -

Proceeds from shares issued - - - - - 753 - -

Increase in appropriation general banking reserve - - - - - 753 - -

Repayments of Borrowings -1,597 -2,393 -1,179 -2,123 - - - -

Proceeds of Borrowings - 1894 - 3,561 - - - - Proceeds from subordinated debts - - - - 3,561 7,845 1,145 1,498

Repayment of subordinated debts - - - - -2,243 -1,176 -798 -713

Net Cash Generated From Financing Activities - -499 -1,179 1,438 1318 5,175 347 785

(Decrease) Increase in Cash Resources 8,275 -98,935 93,010 32,828 -3,864 24,691 -4,911 18,114

Cash Resources - Beginning of Year 42,921 141,859 48,849 81,675 101,682 76,991 81,902 63,788

Cash Resources - End of Year 51,197 42,924 141,859 48,847 97,818 101,682 76,991 81,902





24

Dividend History for BOSVG ($’000)

2012 2011 2010 2009 2008 2007 2,000 1,600 - 3,000 - -

Bank of Saint Vincent and the Grenadines - Key Indicators EC$’000

Particulars (EC$) Dec 2011

6 mths Dec 2010

June 2010

June 2009

June 2008

Profit After Taxes 4,926 5,771 3,310 1,109 15,820

Total Assets 698,038 713,655 764,882 813,249 755,245

Total Liabilities 606,636 627,293 679,838 731,219 671,432

Profit Margin 22% 50% 4% 12% 44%

Return on Equity (%) 5.39% 6.68% 3.54% 1.35% 18.88%

Return on Asset (%) 0.71% 0.81% 0.43% 0.14% 2.09%

Debt Ratio 86.91% 87.90% 88.88% 89.91% 88.90%

Debt to Equity 663.70% 726.35% 799.40% 891.40% 801.11%

Dividend Pay-out (%) 0 0 0 -270.51% 0

Basic EPS ($) 0.49 0.58 0.08 0.21 3.16


25

Table 2. Projected Performance after IPO – Key Indicators

Particulars (EC$) 2016 2015 2014 2013 2012 Return on Equity (%) 7.62 7.30 6.92 6.60 6.66

Return on Asset (%) 1.19 1.10 1.00 0.93 0.91

Debt to Equity Ratio 15.23 19.85 24.96 30.49 36.57

Loans to Deposit 77.94 78.73 79.92 81.12 82.34

Book Value ($) 13.13 12.13 11.25 10.47 9.78

Basic EPS ($) 1.00 0.89 0.78 0.69 0.65

ECFH FINANCIAL HIGHLIGHTS

2011 2010 2009 2008 2007 Income Statement EC$000 EC$000 EC$000 EC$000 EC$000

Interest Income 181,337 138,034 129,848 136,414 126,874 Interest Expense 84,134 63,090 53,120 52,385 53,565 Net Interest Income 97,203 74,944 76,728 84,029 73,309 Other Income 44,246 38,291 35,102 31,118 30,421 Operating Income 141,449 113,235 111.830 115,147 103,730 Staff Costs 43,491 36,297 33,284 30,496 29,633 Administrative Costs 55,313 37,858 32,839 32,198 23,459 Provisions 35,615 32,629 5,888 1,007 1,396 Net Income before Taxes 7,030 6,451 39,819 51,446 49,242 Taxes 1,649 3,239 (13,271) (4,561) (4,998) Minority Interest (2,753) (168) (160) (30) 15 Net Income after taxes and Minority Interests

5,926 9,522 25,938 46,855 44,259

Balance Sheet Cash and Balances with Central Bank

144,923 212,649 76,604 82,859 58,753

Investments 844,449 1,075,496 575,657 576,365 740,525 Loans 1,849,160 1,725,382 1,314,827 1,231,688 1,103,303 Other 350,973 267,467 202,194 151,132 106,103 Total Assets 3,189,505 3,280,994 2,169,282 2,042,044 2,008,684 Deposits 2,560,392 2,619,226 1,539,946 1,462,125 1,498,450 Borrowings 196,800 207,177 231,909 194,861 133,216 Other Liabilities 43,334 64,063 52,903 49,371 58,727 Capital 388,979 390,528 344,524 335,687 318,291 Total Liabilities 3,189,505 3,280,994 2,169,282 2,042,044 2,008,684

Other Information Return on Equity % 1.5 2.6 7.7 14.3 18.0 Return Assets% 0.2 0.4 1.2 2.3 2.5 Dividend Pay-out % 41.3 77.1 46.7 51.1 53.6 Book Value of Ordinary Shares ($)

13.84 14.02 13.97 13.77 13.17

Average Market Value of Ordinary Shares

12.40 14.23 13.09 14.20 11.74

Earnings per Ordinary Share 0.23 0.38 1.06 1.94 2.25 Dividends per Ordinary Share ($)

0.10 0.30 0.50 1.00 1.00

Provisions as a % of Portfolio 3.6 2.5 1.7 1.9 2.4 Provisions as % of Non- Performing Loan Portfolio

29.7 30.0 24.80 34.8 33.8


26

21. PROJECTED FINANCIAL STATEMENTS

FORCASTED INCOME STATEMENT 2012- 2016 2012 2013 2014 2015 2016

Interest income 49,040,831 50,776,009 53,041,482 55,485,158 58,128,829

Interest expense -20,628,781 -21,251,813 -21,964,313 -22,593,375 -23,321,274

Net interest income 28,412,050 29,524,195 31,077,169 32,891,783 34,807,555

Fee and commission income 4,078,160 4,180,114 4,284,617 4,391,733 4,501,526

Dividend income - - - - -

Net foreign exchange trading income 4,808,512 4,868,618 4,990,333 5,127,568 5,281,395

Other gains - - - - -

Operating expenses -27,502,148 -28,139,027 -28,795,567 -29,472,461 -30,170,432

Impairment losses on investment securities

(Impairment losses) of loans and advances, net -1,853,965 -1,903,363 -1,954,269 -2,006,726 -2,060,781

Profit before income tax 7,942,608 8,530,537 9,602,284 10,931,896 12,359,262

Income tax (expense) -1,429,670 -1,620,802 -1,824,434 -2,077,060 -2,348,260

Profit for the period 6,512,939 6,909,735 7,777,850 8,854,836 10,011,003

Earnings per share 0.65 0.69 0.78 0.89 1

Interest Spread 0.579354984 0.581459552 0.58590311 0.59280326 0.598800211


27

FORCASTED BALANCE SHEET 2012- 2016

Assets 2012 2013 2014 2015 2016 Cash and balances with Central Bank 25,001,935 38,601,066 47,002,435 52,896,237 59,570,591

Treasury bills 4,982,156 5,330,906 5,863,997 6,450,397 7,095,436

Deposits with other banks 52,758,991 53,550,376 54,219,755 54,897,502 55,583,721

Financial Assets Held for Trading 50,615 60,738 75,922 94,903 118,629 Loans and receivables customers 463,491,196 475,840,848 488,567,185 501,681,483 515,195,356 - bonds 27,088,767 27,088,767 27,088,767 27,088,767 27,088,767

Investment securities - held-to-maturity 75,344,396 80,995,226 93,144,510 107,116,186 123,183,614

available-for-sale 4,249,481 4,334,471 4,421,160 4,509,584 4,599,775

Pledged assets 1,259,208 1,259,208 1,259,208 1,259,208 1,259,208

Property and equipment 51,220,235 47,540,461 43,860,686 40,180,912 36,501,137 Other assets 6,296,401 6,390,847 6,486,710 6,584,010 6,682,770 Investment property 3,780,000 3,780,000 3,780,000 3,780,000 3,780,000

Income tax recoverable 1,402,117 - - - -

Deferred tax asset 2,010,808 2,010,808 2,010,808 2,010,808 2,010,808

Total assets 718,936,306 746,783,721 777,781,144 808,549,997 842,669,814 Liabilities Deposits to banks 10,367,404 10,937,611 11,539,179 12,173,834 12,843,395

Due to customers 562,922,536 586,578,461 611,338,318 637,257,461 664,394,137

Other funding instruments 1,245,123 1,245,123 1,245,123 1,245,123 1,245,123

Borrowed funds 35,750,314 31,916,786 28,067,319 24,077,793 20,004,305

Other liabilities 10,879,719 11,206,111 11,486,264 11,773,420 12,067,756

Income tax payable - 218,685 1,646,146 708,735 790,465

Total liabilities 621,165,096 642,102,776 665,322,349 687,236,366 711,345,181

Equity Share capital 14,753,306 14,753,306 14,753,306 14,753,306 14,753,306 Reserves 14,753,306 14,753,306 14,753,306 14,753,306 14,753,306

Unrealised gains on investments 1,686,319 1,686,319 1,686,319 1,686,319 1,686,319

Retained earnings 66,578,279 73,488,014 81,265,864 90,120,700 100,131,702

Total equity 97,771,210 104,680,945 112,458,795 121,313,631 131,324,633

Total liabilities and equity 718,936,306 746,783,721 777,781,144 808,549,997 842,669,814


28

Description of Share Capital a) Authorised An unlimited number of ordinary shares without nominal or par value is authorised.

b) Issued

TYPE/CLASS AMOUNT

ISSUED AND FULLY PAID ORDINARY SHARES - 10,000,000

14,753,306

22. ASSUMPTIONS TO THE PROJECTIONS

Basis of Compilation The accompanying projected financial statements for the years ending December 31, 2012 through 2016 have been compiled on the basis employed in preparing the Bank’s historical financial statements, which are prepared in accordance with International Financial Reporting Standards (IFRS), except for the required footnote disclosures. The projected financial statements have been compiled using certain assumptions about future events, economic circumstances regionally and locally, the planned strategic directions and initiative contemplated by management. Summary of Significant Assumptions The following summarizes those assumptions considered material to the compilation of the Bank’s projected financial position as of December 31, 2012, 2013, 2014, 2015 and 2016 and the results of its financial performance and cash flows for those years then ending. Economic Climate The macro-economic fundamentals, because of the fragile recovery of the United States and the global economies which are challenged by the debt crises among certain European Union member states is expected to extend into 2012. The local economy, which is driven by tourism, is not expected to recover before 2013. The local economy is therefore not expected to show real growth before 2014. Further, the rate of growth between 2014 and 2016 is expected to average 2.5%. Investment Securities The Bank’s portfolio of investment securities is expected to comprise of a mix of held-for-trading, held-to-maturity, and available for sale investments. Because of the improvements in the Bank’s liquidity position and the relative softness in the lending market, the Bank has taken a long position on certain regional securities. Consequently, the Treasury bill position and the held-to-maturity positions were decreased and increased by 39% and 70% respectively. Following the repositioning of the investment portfolio, the Treasury bill, held-to-maturity and available-for-sale portfolios are projected to grow 6-10%, 2.5-15% and 7% per annum respectively. During the period 2012 through 2016, the Bank plans to undertake some diversification of this portfolio, consistent with its risks mitigation policy. On average, the portfolio is expected to generate an annual rate of return of 7%.


29

Loans to Customers Due to the privatization, the Bank is expected to be more attractive to the business sector and private individuals. During 2012 through 2016, the Bank will be in a position to gain market share in the corporate and business lending sectors. This is largely due to management’s intimate knowledge of the market and its responsiveness to the market segment needs. Its corporate, mortgage, and consumer lending are projected to grow during 2012, 2013, 2014, 2015 and 2016 by 3.0%, 2.5%, 1.75% and 1.75% per annum respectively. Further, corporate, mortgage and consumer portfolios are expected to yield a return of 9.5%, 8% and 10% per annum respectively. Overdrafts are expected to yield 10% per annum. Loan Loss Allowance In light of the Bank’s lending and risk mitigation policies, losses on loans and advances are projected at ½% of the total portfolio. Investment Properties During 2011, the Bank acquired investment properties having a carrying value of $3.78 million. Those properties are expected to realize over a five-year period a rate of return of 50%. The realizations of the properties are not accounted for in the financial projections. Deposits with Other Banks To facilitate the seamless clearing of customer transactions, its foreign exchange trading activities and some degree of currency diversification, the Bank is expected to maintain a number of foreign exchange denominated balances with its correspondent banks. Accordingly, these holdings are not specifically geared to generate a direct return. The deposits with other banks are expected to grow by 1.75%. The rate on the foreign currency denominated accounts is therefore expected to be negligible. Due to Customers The Bank plans to maintain its basic deposit products coupled with improved customer service and some innovative attractions. Because of the forecast economic outlook, liquidity is expected to tighten. Consequently, during 2011 customer deposits are expected to contract by 3%. From 2012 onwards, customer deposits are therefore projected to grow 4 % per annum. Borrowed Funds The Bank contemplates borrowing an additional $12 million at 7.5% from a regional financial institution. Deposits from Other Banks The Bank is expected to act as correspondent bankers for other regional indigenous banks. The growth of this portfolio is expected to be modest. Fees and Commission Income The Bank contemplates the introduction of new and expanded services offered to customers. In this regard, the Bank projects robust growth in its fee and commission revenue. For the period 2012 to 2016, the Bank projects an annual growth rate of 2.5% in its fee and commission revenues. Foreign Exchange Trading Income Foreign exchange trade during the next five years is forecast to be driven by the expansion in consumer trade in the former part and by the recovery of the tourism sector in the latter part as the tourism sector rebounds. In light of the forecast, foreign exchange earnings are projected to grow at the annual rate of 0.75%, 1.25%, 1.25%, 2.5%, 2.75% and 3% each year through 2016%. Operating Costs Commencing 2012 financial year, the Bank, as a result of certain strategic initiatives, expects to implement an operational costs rationalization programme. The opening of the new head office at Reigate is expected to generate rental savings of approximately $900,000 per annum. During the period 2011 through 2016, employees’ benefits are projected to increase by 2.5% per annum. Other operating costs are projected to increase at the rate of 2.5% per annum.


Tel: 784-456-2300Fax: 784-456-2184www.bdo.vc

Sergeant-Jack DriveArnos ValeP.O. Box 35Kingstown VC0100St. Vincent

BDO Eastern Caribbean, a partnership registered in St. Vincent and the Grenadines and St. Lucia, is a member of BDO International Limited, a UK company limitedby guarantee, and forms part of the international BDO network of independent member firms.

The Board of DirectorsBank of St. Vincent and the GrenadinesUpper Halifax StreetP.O. Box 880KingstownSt. Vincent

August 13, 2012

Ref: BOSVG/AuditorsConsent

Bank of St. Vincent and the Grenadines

1. We refer to the prospectus of Bank of St. Vincent and the Grenadines Ltd. relating to theissue of 2,000,000 ordinary shares of no par value at $8.64 per share on the Eastern CaribbeanSecurities Exchange.

2. We have read the Prospectus and complied with International Standards for Auditing – 720,the auditors’ responsibilities in relation to Other Information in Documents Containing AuditedFinancial Statements.

3. We hereby consent to the inclusion in the above-mentioned Prospectus, of the followingfinancial information extracted from the Bank’s financial statements for the years ended June30, 2007 through 2010:

Statement of Financial Position

Statement of Comprehensive Income

Statement of Cash Flows

4. We have not compiled, reviewed or audited the projected financial statements for the yearsending 2012 - 2016 included in the prospectus, accordingly we do not express any opinion or anyform of assurance with respect to that information.

5. This letter is provided solely for the purpose of assisting the Directors of the Company towhich it is addressed in discharging their responsibilities and should not be used for any otherpurpose. Any use that a third party make of this letter, or any reliance or decisions made basedon it, are the responsibility of such third parties. We accept no responsibility for loss ordamages, if any, suffered by any third party as a result of decisions made or actions taken basedon this letter.

Yours faithfully,

Floyd A. PattersonPartner

23. APPENDICES


39

APPENDIX 3: AUDITORS REPORT


41


42


43


44


46

APPENDIX 4: LIST OF LICENSED ECSE MEMBER BROKER DEALERS

LIST OF ECSE-MEMBER INTERMEDIARIES

INSTITUTION

CONTACT INFORMATION

ASSOCIATED PERSONS

Article I. Anguilla National Bank of Anguilla Ltd

P O Box 44 The Valley Tel: 264-497 2101 Fax: 264-497 3870 / 3310 Email: [email protected]

Principal Selwyn Horsford Representative Shernika P. Connor

Article II. Antigua and Barbuda ABI Bank Ltd ABI Financial Centre

Redcliffe Street St John’s Tel: 268 480 2824 Fax: 268 480 2765 Email: [email protected]

Principals Carolyn Philip Casroy James Representative Heather Williams

St Kitts and Nevis St Kitts Nevis Anguilla National Bank Ltd

P O Box 343 Central Street Basseterre Tel: 869 465 2204 Fax: 869 465 1050 Email: [email protected]

Principals Winston Hutchinson Anthony Galloway Representatives Petronella Edmeade-Crooke Angelica Lewis Marlene Nisbett

The Bank of Nevis Ltd

P O Box 450 Main Street Charlestown

Principal Brian Carey Representatives


47

INSTITUTION

CONTACT INFORMATION

ASSOCIATED PERSONS

Tel: 869 469 5564 / 5796 Fax: 869 469 5798 E mail: [email protected]

Vernesia Walters Kelva Merchant Lisa Jones

St Lucia ECFH Global Investment Solutions Limited

5th Floor, Financial Centre Building 1 Bridge Street Castries Tel: 758 456 6826 / 457 7233 Fax: 758 456 6733 E-mail : [email protected]

Principals Beverley Henry Donna Matthew Representatives Dianne Augustin Deesha Lewis

First Citizens Investment Services Limited

9 Brazil Street Castries Tel: 758 450 2662 Fax: 758 451 7984 Website: http://mycmmb.com

Principals Carole Eleuthere-Jn Marie Representative Samuel Agiste

St Vincent and The Grenadines Bank of St Vincent and the Grenadines Ltd

Reigate Building Granby Street P O Box 880 Kingstown

Tel: 784 457 1844 Fax: 784 456 2612/ 451 2589 Email: [email protected]

Principals Monifa Latham Keith Inniss Representatives Patricia John Lawrence Jean


49

PROSPECTUS FOR INTITAL PUBLIC OFFERING

APPENDIX 5: LIST OF LICENSED ECSE MEMBER BROKER DEALERS APPLICATION FORM

BANK OF SAINT VINCENT AND THE GRENADINES LIMITED INTIAL PUBLIC OFFERING

APPLICATION FORM The public offering of 2,000,000 ordinary shares in Bank of Saint Vincent and the Grenadines Limited, being shares divested by the Government of Saint Vincent and the Grenadines will open at 9 am on 27 December 2012 and will close at 2.00 pm 25 January 2013.

Number of Shares Applied For * Amount Due for Shares on Application

*Applications to be made for a minimum of 50 shares and in multiples of 5 thereafter. I/ we enclose the sum of EC$______________ being the amount payable on application for the above stated number of shares. I/ we understand that I/we will also be required to pay applicable brokerage fees and commission, the terms of which have been made available by the Broker/Dealers.

Please complete the following information using block letters:

(1) CORPORATION Name of Corporation

Registry A/C# Address in full (Including P O Box Number) Telephone No(s): Personal: Business: Type of Business a) Name of Authorized Official Designation of Authorized Official b) Name of Authorized Official Designation of Authorized Official c) Name of Authorized Official Designation of Authorized Official (2) INDIVIDUAL

Surname and Title (Mr, Mrs, Miss, Ms) Other Name(s) in full Date of Birth: (DD MM YYYY) Address in full (Including P O Box Number) Telephone No(s): Personal: Business:


50


National of St Vincent & the Grenadines (If No, State Country) Yes No Country:_______________ Passport/National ID Number & Country of Issue Other Citizenships/Residencies Held Occupation Email Address Registry A/C# (If applicable) The above individual will serve as the primary holder to receive corporate communication and dividends unless specified otherwise. Refunds in respect of shares applied for but not allotted will be made to all of the applicants concerned by their brokers within five (5) business days of the close of the allotment period. Refunds will be made to clients as per the preferred payment method selected on this application form. PLEASE REGISTER JOINT OWNER(S) AS FOLLOWS: Please be advised that the securities will be held as Joint tenants with rights of survivorship. The Applicant listed above will be recognized as the Primary Holder. Surname & Title (Mr, Mrs, Miss, Ms): _________________________________

Surname & Title (Mr, Mrs, Miss, Ms): ____________________________________

Other Name(s) in Full: _________________________________

Other Name(s) in Full: ____________________________________

Address in full:_____________________ Address in full: _______________________

Telephone No(s):___________________ Telephone No(s): ______________________ Date of Birth: (DD MM YYYY) _____________ Date of Birth: (DD MM YYYY) _________________ National of St Vincent & the Grenadines: (If Not, State Country)

National of St Vincent & the Grenadines: (If Not, State Country)

Yes No Country:_____________ Yes No Country:_______________ Other Citizenships/Nationalities Held: _________________________________

Other Citizenships/Nationalities Held: __________________________________

Occupation: Occupation:

Passport/National ID No: _____________ Passport/National ID No: _______________ Country of Issue: ___________________ Country of Issue: _____________________ Registry Account Number (if applicable): Registry Account Number (if applicable): ________________________________ __________________________________


51


Email Address: Email Address:

Method of Payment Preferred: Method of Payment Preferred:

Dividend Check to be mailed to the following address:

EC$ funds to be deposited directly to my/our bank account:

Bank Name:_________________________ Account Number:____________________ Bank Address:_______________________ ____________________________________ Declaration: I/We the applicant(s), by signing this application form, acknowledge that I/we have read the Terms and Conditions of the Offer of Shares of Bank of Saint Vincent and the Grenadines Limited and agree that by signing this application form I/we have agreed to those terms. The signature(s) below is/are executed for and on behalf of the applicant/all applicants on this Form.

APPLICANT'S SIGNATURE: _______________________________________________




52


TERMS, REPRESENTATIONS & WARRANTIES OF THE OFFER THE APPLICANTS/APPLICANT BY SIGNING THIS APPLICATION FORM UNDERTAKE(S), REPRESENT(S) AND WARRANT(S) TO THE OFFEROR AS FOLLOWS: (i) The information on the Application Form is full, true and complete; (ii) I/We have the legal capacity and authority and am/are permitted by applicable

law to execute and deliver this Application Form; (iii) I/We understand that the offer is only being made in St Vincent and the

Grenadines and the other ECCU Member Countries, namely, Anguilla, Antigua and Barbuda, Dominica, Grenada, Montserrat, St. Kitts and Nevis and St Lucia, to Nationals of the above-named countries, and to entities incorporated or domiciled in St Vincent and the Grenadines, and is being conducted in compliance with the applicable laws of St Vincent and the Grenadines. I/we represent that the shares are not being purchased directly or indirectly for the account of a person who is not a National of these countries, or for an entity that is not incorporated or domiciled in St Vincent and the Grenadines. I/we submit exclusively to laws of St Vincent and the Grenadines and the jurisdiction of St Vincent and the Grenadines including any rights or remedies that may be available therein;

(iv) I/We have read the Prospectus of this Share Offer and understand that the terms

and conditions expressed in the Prospectus are incorporated into this Application Form.

(v) I/We understand that, in the case of two or more joint applicants, the first-named

joint applicant will be designated the primary holder of the shares allotted, and agree and give consent to the designated primary holder to act on our behalf in all matters pertaining to these shares.

(vi) I/We understand that the submission of this Application Form does not confirm

and/or guarantee that all or any of the shares applied for will be allotted to me/us.


NOTES


Bank of Saint Vincent andthe Grenadines LimitedReigate BuildingGranby StreetP.O. Box 880KingstownST. VINCENT AND THE GRENADINES, VCTelephone Number: 784 457 1844Facsimile Number: 758 456 2612

Parent company of: Bank of Saint Lucia Limited | Bank of Saint Lucia International Limited Bank of St. Vincent & The Grenadines Limited EC Global Insurance Company LimitedECFH Global Investment Solutions Limited