The Tribune

By NATARIO McKENZIE


Tribune Business Reporter


nmckenzie@tribunemedia.net

Commonwealth Bank executives said yesterday they were “cautiously optimistic” regarding the bank’s performance outlook for the remainder of 2014, after reporting a $13 million profit for the three months ended March 31.

Ian Jennings, its president, said the anticipated opening of the $2.6 billion Baha Mar project was expected to have a significant impact on the economy.

“We will continue to approach the year cautiously. One of the major developments is Baha Mar. They have announced plans to increase their staff by some 4,000 by the end of November,” Mr Jennings said.

“This new employment will make a big difference to the economy, so that is a positive factor. One of the areas we continue to be concerned about is the positioning of government financing and how the rating agencies review the performance of the country. Obviously downgrading is a serious issue that we continue to monitor.”

Mr Jennings noted that apart from 2012, the 100 per cent Bahamian-owned bank continues to produce excellent results six years into the global economic slowdown. “We look to maintain that level of performance with improvement in some areas,” he added.
 Patrick McFall, Commonwealth Bank’s vice-president and chief financial officer, said the $13 million first quarter profit exceeded the same period in 2013 by 3.5 per cent.

“Total assets at March 31, 2014, were $1.46 billion ,which was slightly above December 2013 total assets of $1.43 billion. The bank’s good performance is underscored by improvements in our return on assets and earnings per share ratios of 3.26 per cent and $0.48, which exceeded 2013 by 3.5 per cent and 4.2 per cent, respectively,” said Mr McFall.

He added: “Total profit improved primarily due to the quality of the bank’s credit, combined with its effective management of the same. As a result of the foregoing, Commonwealth Bank reduced its loan impairment expense in 2014 by 32.6 per cent per cent or $2.1 million compared to 2013.

“The reduction resulted from improved delinquency and non-performing loan ratios. Commonwealth Bank’s non-performing loan ratio of 4.07 per cent continues to significantly outperform the industry average non-performing loans of 15.97 per cent at March 2014, as reported by the Central Bank of the Bahamas.

“The bank also continues to maintain strong capital and liquidity ratios, with capital adequacy in excess of 25 per cent and liquidity ratio of 36 per cent. These ratios are well in excess of Central Bank’s requirements of 17 per cent and 20 per cent, respectively. We are cautious about the prospects for 2014, as to-date there has only been small improvement in the economy.”