The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Bank of the Bahamas International says its business restructuring, coupled with improved margins and an increase in new business, drove a 91 per cent net income increase for its 2013 first quarter.

Although Paul McWeeney could not be reached for comment, in a note to shareholders the Bank of the Bahamas International’s managing director said net income for the three months to end-September 2012 rose by almost $1 million - from $1.09 million in the 2011 comparative period to $2.06 million this time around.

A $1.231 million preference share dividend, the same as that paid in 2011, reduced the profits available to Bank of the Bahamas International’s common shareholders. These equity capital investors, who take all the risk, still saw a $970,000 swing year-over-year, with their net income share rising to $829,160 or $0.05 in earnings per share (EPS), compared to a modest $141,677 loss in last year’s first quarter.

Mr McWeeney told shareholders: “The increase in profitability reflects success as we transition through the remodelling of the bank’s book of business, aimed at counterbalancing systemic economic weaknesses that have manifested themselves in elevated unemployment rates, causing loan arrears to remain high and a need to recognise considerable loan loss provisions.

“Total operating income is up from prior year by approximately 30 per cent, and is primarily attributable to an increase in new business and improved margins as a result of healthy system liquidity and a redemption in a portion of the mortgage-backed bonds.

“While provisions grew $1.3 million over prior year, the bank was able to minimise the growth in operating expenses to less than 5 per cent for the period.”

Bank of the Bahamas International’s total assets stood at $845 million at end-September 2012, while its capital ratios were well above Central Bank of the Bahamas minimums.

Mr McWeeney added: “We remain focused on sustainable growth for the bank, and our outlook is positive for the medium to long-term.”