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Chavez to nationalise Santander bank unit

Latest update : 2009-03-20

Venezuelan President Hugo Chavez announced that his government will go ahead with the nationalisation of the local unit of the Spanish bank Grupo Santander. The bank owns Banco de Venezuela, one of the largest in the OPEC nation's financial system.

REUTERS - Venezuela will go ahead with the nationalization of the local unit of Spanish bank Grupo Santander, President Hugo Chavez said on Thursday, weeks after officials said the purchase was on hold.

Since first winning office a decade ago, Chavez has nationalized large swathes of the OPEC nation's economy and this year has moved to increase state control of farms and food production despite a sharp drop in oil income.

"We are not retreating. Today we have returned to the subject, I announce the nationalization of Banco de Venezuela to strengthen the national public banking system," Chavez said during a televised meeting with ministers.

Grupo Santander owns Banco de Venezuela, one of the largest banks in the OPEC nation's financial system.

The former paratroop soldier who plans to build a socialist system in Venezuela has been busy since winning a referendum in February that allows him to run for re-election as often as he likes.

Over the last month he has threatened to take over the country's top private employer Empresas Polar; nationalized a rice mill belonging to U.S. food giant Cargill; and taken over a number of farms, including a plantation belonging to Irish cardboard maker Smurfitt Kappa.

He also has stripped control of ports and airports from state governments, weakening opposition governors who previously controlled some of the country's main trade routes.

Chavez ordered the purchase of Banco de Venezuela in July but talks with the Spanish company stalled as oil prices plummeted in recent months, and bank officials and a top government official linked to the discussions told Reuters in March that the sale would not happen this year.

Local media reported last year the Chavez offered $1.2 billion for the bank, $600,000 less Santander's asking price.

Chavez say he wants the Santander unit to help channel state resources to small farmers and other grass-roots groups.

The Cuba ally took over four major oil projects in 2007 worth an estimated $30 billion. In most cases fair compensation was paid, but U.S. companies Exxon and ConocoPhillips quit the country over the move and filed arbitration claims against Venezuela.

Compensation has yet to be agreed for Venezuela's largest steel plant and three foreign owned cement companies, all of which were taken over by the government last year.

Date created : 2009-03-20

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