Banco Nacional de Nicaragua
List of Deals
The Banco Nacional de Nicaragua was originally incorporated in Connecticut in December 1911 under the name the National Bank of Nicaragua. It was established to serve the following purposes: (1) to act as the fiscal and disbursing agent of Nicaragua; (2) to be the depository of government funds; (3) to put into effect and maintain a currency system; (4) to issue bank notes; and (5) to coin money and transact other business for the Nicaraguan government.
In October 1913, Brown Brothers & Company and J.W. Seligman & Company purchased 51 percent of the stock in the bank from the Republic of Nicaragua.
The establishment of this bank and the subsequent purchase of a controlling interest in it by American banking firms was an attempt by Americans to restore financial stability to Nicaragua, which was politically unstable. It was done to ensure that the millions of U.S. dollars owed by Nicaragua to American banks and other investors would be repaid.
In 1924 the government of Nicaragua purchased back the 51 percent held by a syndicate of New York bankers. At the time it was described as the conclusion of an operation begun in 1912 to reform the currency of Nicaragua.
Through the next few decades, Americans periodically played a role in the operations of the National Bank of Nicaragua. The Manhattan Trust Company assumed management of the bank in 1930. The composition of the board of directors was changed to include three Americans in 1937. This was done at the same time President Anastasio Somoza of Nicaragua was requesting a loan of $2.5 million from the United States to develop a canal from the Atlantic to Lake Nicaragua using the San Juan River.
In 1940 the bank was once again reorganized under the laws of Nicaragua. In the late 1950s, the issue department of the bank had the sole power to issue Nicaraguan currency, which was based on a gold and foreign exchange stabilization fund.
The bank had 592 employees in 1958, and the combined assets of the issue and banking departments amounted to 1.27 billion cordobas.
At the end of 1969, the bank had $139.5 million in assets.