Banking, I just have to ask

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monaco09

New member
Jun 4, 2003
106
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A poster here recently mentioned ScotiaBank in the DR giving 1.5% on USD deposits. I know Scotia well and they are as solid as virtually any bank.

If they pay 1.5% and the other banks pay 10% or whatever, the only explanation can be risk premium. After BanInter especially I cannot understand why so many are using these banks.

If you want that much risk find junk bonds etc. and you can earn better rates.

I would love to hear from some investors in these banks as to why they feel they are safe. If I can be convinced I'd love to put money in a safe CD at 10% also...

With that kind of spread in returns money would be flowing into those banks at obscene rates if it were legit and safe.
 
E

Escott

Gold
Jan 14, 2002
7,716
6
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www.escottinsosua.blogspot.com
Hi,
I want to say my thoughts and give you reasoning behind them.

First I wouldnt put more than pocket change in ANY Dominican Bank in US dollars. I wouldnt keep any more than Pocket Change in PESOS.

I wouldnt keep money in pesos because I am scared shitless of depreciation of the peso against the dollar.

I wouldnt keep any money in the banks in the DR because they are controlled by the Government. When the time comes that they cannot repay the Sovereign Bonds and "I" feel it will come sooner than later, the Government will in my opinion ORDER all BANKS to change Dollars into Pesos. They will need YOUR dollars to pay for things like Gasoline, OIL, payments to Foreign Power Companies for Electric and Bottled Gas. You don't think anyone in their right mind would take payment in Pesos, do you?

If you don't think this is a possibility look into what happened in Argentina and before them Ecuador.

I have most of the money in the Country invested with a finance house. If you put in over 100k you can be backed by a mortgage on a property with a higher value. At least you have something.

I have posted these thoughts before.

Scott
 
R

ricktoronto

Grande Pollo en Boca Chica
Jan 9, 2002
4,837
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Banking Safety

When it comes time to retire in the DR I would consider ScotiaBank to enable transactions (e.g. a a retail branch to use for funds elsehwere) but my funds would be in Cayman or Bahamas as I want to be a non-resident ( I am in Canada) and not the DR for the risks mentioned - nationalization is not out of the question. Scotia lost a bundle on Quilmes in Argentian and just walked away $400MN US$ poorer but they had no choice.
 
D

DCfred

New member
Jun 19, 2003
344
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With that kind of spread in returns money would be flowing into those banks at obscene rates if it were legit and safe.


Money is a commodity and higher interest rates indicate that money is in short supply. Although, it has been downgraded by Fitch, you can get some good deals with Banco BHD with their commercial paper issues (Certificados de Acreencia). The Central Bank has tried to tighen the money supply as of late in order to control inflation and attract investment. Remember that any high returns in pesos will be offset by inflation and the higher cost of buying dollars, if you need to convert your pesos.
 
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