The Venezuelan government announced that Banco Nacional de Credito (BNC) was the winner of the auction to control the assets and liabilities of Stanford Bank de Venezuela, a local commercial bank.
Although the press is characterizing this as a "sale" it was not really a sale, but rather a "recapitalization" and here is why:
In February, Stanford Bank de Venezuela, owned by Allen Stanford, was taken over by the Venezuelan government after the SEC filed a civil complaint that Mr. Stanford was running a ponzi scheme out of his Antigua bank.
Subsequently, the bank was declared insolvent and equity was written down to ZERO (declared lost). At that point it had NO capital and the owner was basically NOBODY.
An auction process to recapitalize the bank and assume the bank's liabilities (deposits) and assets was initiated and after two failed trials, BNC was declared the winner.
BNC will inject 240 million bolivars ($112 million at the official rate, $35 million at the rate everyone else has to use) to replish Stanford Bank de Venezuela's capital. This money will go into Stanford Bank de Venezuela, which will be then merged with BNC. BNC is basically paying to cover any further losses at what is now its own bank. The Venezuelan government gets NO money from this sale. Allen Stanford's "estate" gets NO money from this sale. The bank was basically given away to whoever put enough money in to recapitalize it.
For the depositors of Stanford International Bank in Antigua there is nothing to see here.
Stanford Bank de Venezuela reported a book value of Bs.88.3 million ($41 million official rate, $13 million otherwise) as of December 2008.