The Tribune

Commonwealth Bank’s chairman has told shareholders that 2013 will not be about growth, but stability and strength.

“We will forego growth in favour of prudence, and that will keep Commonwealth Bank strong, stable and profitable, the number one Bahamian bank in the nation,” said William B. Sands, Jr., addressing hundreds who attended Commonwealth Bank’s Annual General Meeting (AGM).

With net income of $36 million in 2012, despite $44 million in loan write-offs and little hope for major economic recovery until Baha Mar opens in late 2014, Mr Jennings said the bank would continue on its conservative path.

“In 2013, the bank will maintain its focus on the consumer market, which has served us well,” chief financial officer, Patrick McFall, said.

“Recognising the challenges of the day, we also intend to be led by quality over quantity. This means we will forego growth over prudence, believing that this will benefit the bank and consequently benefit you, our shareholders, in the long term.”

Ian Jennings, Commonwealth Bank’s president, said it would target areas such as online banking for modest growth. It also plans to introduce mobile banking.

The only physical expansion, Mr Jennings said, would be the Oakes Field branch, which had outgrown the capacity needed to serve the public.

That branch is temporarily closed, the victim of fire less than one week later during the height of the major rainstorm on May 21. Work on the branch, initially scheduled for the fourth quarter, is now expected to be advanced to an earlier date.

Despite references to the five-year-long recession, the Commonwealth Bank paid $28.5 million in shareholder dividends in 2012, maintaining its policy of sharing 65 per cent of profits with its more than 4,000 shareholders from every walk of life. And, on the day of the AGM, Commonwealth Bank’s share price hit the highest price traded this year, $6.79.

“The highest traded shares of BISX reflects the desirability of the shares even in uncertain times,” said Mr Jennings, crediting effective management and “absolute dedication to excellence in service by all the management and staff of Commonwealth Bank”.

Along with additional scrutiny of every loan, Messrs Jennings and McFall said tighter controls had resulted in higher efficiency ratios.

Those recession-bred refinements, however, will not alter the formula for success identified by Commonwealth Bank - the widespread, broad-based consumer loan, with the average amount in the $16,000 range to avoid catastrophic loss in a single default.