Global Bank of Commerce reportedly hoping for a ‘bail-in’ from depositors to get it back on track as it has fallen victim to de-risking

The embattled Global Bank of Commerce (GBC) is in the process of
restructuring its operations, according to Prime Minister Gaston Browne, and
is now considering a proposed bail-in that might get it back on sound financial
footing.
 
A bail-in helps financial institutions that are on the brink of failure by
requiring the cancellation of debts owed to creditors and depositors.
 
In this case, Browne is hoping that clients will come together and convert
some of their deposits into equity in order to strengthen the bank’s balance
sheet.
 
Browne made this disclosure on Saturday, June 1, as, once again, he appeared
to be the spokesman for the struggling institution, which has been the subject
of a high-profile lawsuit.

He says that GBC is making every attempt to reorganize the way in which it
does business and he is waiting anxiously to see the outcome of the bank’s
efforts.
 
According to Browne, GBC’s biggest problem was created by de-risking.
Further, it faced a situation in which customers were systematically
withdrawing money while the institution was unable to bring in deposits –
which could create a condition in which the bank becomes unable to pay its
depositors.
 
This would then undermine the integrity of the bank and could cause a run on
the institution, Browne says.
For the past few years, Global Bank of Commerce has been in a legal dispute
with depositor Jack Stroll, and the matter blew up in the public domain in
2023.

Stroll has been seeking to withdraw more than US$10m that he deposited
with the bank, prompting Prime Minister Browne to condemn him as being
“greedy” and politically motivated.
 
The businessman has since waged a campaign to redeem his money by suing
both the bank and Chief Executive Officer Brian Stuart-Young and by using
various public platforms – including billboards and even a reggae song – to
pressure the institution and its CEO. And up to Monday, June 3, Stroll was
asking: “Where has the money gone, Brian Stuart-Young?”

Earlier this year, in Parliament, PM Browne admitted that GBC was seeking a
bail-out and that an unnamed investor was being vetted, accordingly.
There has been no further word on this course of action since suspicions arose
that the potential buyer was a person reportedly involved in a bank fraud in
China three years ago. When asked for confirmation, in Parliament, Browne
refused to give a direct answer.