National Bank of Solomon Islands

National Bank of Solomon Islands (NBSI) has the largest network of offices (eight branches and eight agencies) in the Islands. Although the Bank overall is profitable, the offices outside Honiara, the capital, are running at a loss. On 27 April 2007, Bank South Pacific made a formal announcement to the Port Moresby stock exchange that it had wholly acquired NBSI. Bank of South Pacific (BSP) intends to convert NBSI from a subsidiary to branches of BSP.

History

In 1951 Commonwealth Bank of Australia, the government-owned Australian bank, established a branch in the Solomon Islands. In 1981 Commonwealth transferred its operations in the Solomon Islands to the National Bank of Solomon Islands, which operated a joint venture (51-49, Commonwealth and Government of the Solomon Islands). At the time the bank had two branches, 14 agencies, and some 50 staff. In 1994 Commonwealth sold its shares in the National Bank of Solomon Islands to Bank of Hawaii. In 2002 Bank of Hawaii, which was undoing its strategy of acquiring banks in the Pacific, was unable to find a buyer for its shares. Bank of Hawaii then simply gave its 51% stake in NBSI to the Government of the Solomon Islands. Until BSP bought NBSI, the people of the Solomon Islands indirectly owned the bank through four trusts: National Provident Fund (NPF), which owned 49%, and three other trusts, the NBSI Health and Welfare Trust, NBSI Education Trust, and NBSI Employees Trust, each of which owned 17%.

In 2003, widespread public unrest over the failure of a pyramid investment scheme forced ANZ to hire a charter jet to fly its expatriate bank officials to Melbourne. Westpac, National Bank of Solomon Islands, and the Solomon Islands central bank closed their branches. Eventually. all four reopened.