by Georgina Maka’a
Finance Minister Gordon Darcy Lilo has called for the return of the National Bank of Solomon Islands (NBSI).
He was speaking today at the 50th anniversary of the Central Bank of Solomon Islands (CBSI).
NBSI was established in 1981as a joint-venture between the Commonwealth Bank of Australia (51%) and Solomon Islands Government (49%).
Lilo said NBSI once provided banking services to rural communities across the country.
“Before then, NBSI was a symbol of national ownership, a bridge connecting rural communities to modern banking, and a foundation for economic resilience, “ the Finance minister stated.
“During those days, NBSI had a presence right into the rural areas.,” he added.
“For decades, it provided the widest network of banking services across our islands, ensuring that even the most remote communities could save securely, access credit, and participate in the economy.”
Lilo said bringing back NBSI is about ownership and making sure financial services reach everyone.
“The re-establishment of NBSI is important for restoring a sense of ownership, strengthening our sovereignty over financial intermediation, and ensuring that financial services are inclusive and meet the needs of our people – especially in rural areas, where access to financial services and affordable credit is difficult.”
The Finance minister has called on existing financial institutions to make their services affordable and reliable for the nation.
“Bringing back NBSI is not about going back to the past.
“It is about building a resilient financial future — one that complements existing operations,” he said.
In 1994, thirteen years after the establishment of NBSI, Commonwealth Bank of Australia sold its 51 per cent stake to the Bank of Hawai’i as part of its withdrawal from the Pacific retail banking.
When Bank of Hawai’i exited the Pacific in 2002, it transferred its 51 per cent shareholding to the Solomon Islands Government after failing to find a buyer – turning NBSI into a full-fledge local bank.
Ownership then was restructured into four local trusts:
-
Solomon Islands National Provident Fund (SINPF/then NPF) — 49%
-
NBSI Health and Welfare Trust — 17%
-
NBSI Education Trust — 17%
-
NBSI Employees Trust — 17%
In 2007 however, NBSI was sold to Papua New Guinea’s Bank South Pacific (BSP), and later integrated it into BSP’s regional operations.
The local shareholders agreed not simply to receive cash proceeds but to convert much of their value into shares in BSP.
SINPF alone invested approximately US$6 million into BSP shares as part of the transaction, allowing the fund to retain an indirect stake in the enlarged regional bank.
