Chavez Threatens To Nationalize Venezuelan Banks

CARACAS, Venezuela — President Chavez yesterday threatened to nationalize the country's banks and largest steel producer, accusing them of unscrupulous practices.

"Private banks have to give priority to financing the industrial sectors of Venezuela at low cost," Mr. Chavez said. "If banks don't agree with this, it's better that they go, that they turn over the banks to me, that we nationalize them and get all the banks to work for the development of the country and not to speculate and produce huge profits."

It was not clear if Mr. Chavez was only referring to Venezuelan banks like Mercantil Servicios Financieros CA and Banco Provincial SA, or if he was also aiming the threat at major international banks with subsidiaries in the country, such as Citigroup Inc. and Spanish banks Banco Bilbao Vizcaya Argentaria SA and Banco Santander Central Hispano SA.

Mr. Chavez also warned the government could take over steel producer Sidor, which is majority controlled by Luxembourg-based Ternium SA. Shares of Ternium fell 3.9% to $26.15 in U.S. trading after Mr. Chavez's comments.

Sidor "has created a monopoly" and sold the bulk of its production overseas, forcing local producers to import tubes and other products from China and elsewhere, Mr. Chavez said.

"If the company Sidor ... does not immediately agree to change this process, they will obligate me to nationalize it," Mr. Chavez said.