January 11, 2018 / 2:55 AM / 5 months ago

Venezuela to buy top private bank Banesco for $3.5 mln -official

CARACAS, Jan 10 (Reuters) - Venezuela’s government is in talks to buy the country’s top private bank, Banesco, for $3.5 million, a top Socialist Party official said on Wednesday, potentially expanding state control over a banking sector struggling under soaring inflation.

Socialist Party Vice President Diosdado Cabello said talks would begin this week and that Banesco President Juan Carlos Escotet had accepted an offer made by the government.

“We’re going to buy Banesco, really cheap,” said Cabello, who is a member of an all-powerful legislative body called the Constituent Assembly, during his weekly television show. “We want to thank Escotet. ... Banesco will become part of the public banking system.”

Cabello, who is influential in the Socialist Party, does not have an official role in finance or state banking.

Venezuela’s Information Ministry, which fields inquiries on behalf of the Ministry of Economy, Finance and Public Banks, did not immediately respond to an email seeking comment.

Reuters was unable to immediately obtain comment from Banesco or Escotet.

Late socialist leader Hugo Chavez expanded the state’s role in the banking sector with the nationalization of Banco de Venezuela, which had been in the hands of Spain’s Grupo Santander and was previously the country’s top bank.

Venezuela’s collapsing economic system has created inflation of 2,600 percent, according to opposition legislators, which has sharply deteriorated the value of private banks whose assets are primarily in local bolivar currency. (Reporting by Brian Ellsworth; Editing by Leslie Adler)

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