The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Bank of the Bahamas is still unable to hold its annual general meeting (AGM) for the 2013 financial year because the Government has yet to supply it with the Board of Directors appointments, Tribune Business was told yesterday.

Paul McWeeney, the BISX-listed bank’s managing director, confirmed that it was waiting on its 65 per cent “majority shareholder” to send the standard letter confirming the director appointments - a prerequisite to holding its AGM.

“We’re working on that right now,” Mr McWeeney said of the AGM, when contacted on the matter by Tribune Business.

“We’re trying to get a more definitive position from the majority shareholder on when we’re going to hear from them. Every year they have to give us a letter detailing who the directors are. That’s a protocol we have to follow.”

AGM’s are a key annual feature of public company life, as they provide a ‘transparency platform’ for shareholders to ask questions of management and the Board.

Protocol also dictates that the directors for the upcoming financial year have to be voted on by the shareholders, hence the difficulty Bank of the Bahamas is having in staging its AGM - because it still does not know who the director nominees are.

But, with the Government (via the Treasury and National Insurance Board) holding a combined 65 per cent stake, those nominated will not be seriously challenged.

The directors are nominated via the Ministry of Finance, but it seems likely that its attention has been consumed by the Budget and Value-Added Tax (VAT) situations, relegating Bank of the Bahamas on the priority chain.

Yet it is almost 12 months since the bank’s 2013 year-end closed on June 30, and with no AGM date yet in sight, Bank of the Bahamas is now preparing to enter its 2015 financial year in several weeks.

It appears likely that it may have to seek an extension for holding its AGM from either BISX or the Securities Commission, and Mr McWeeney said the bank and its legal advisers were currently examining whether this would be necessary.

“We’re trying to get clarity on that right now,” he told Tribune Business. “The practice has been to have it in 12-month cycles from the last AGM. I can’t say anything more than that.”

Confusion appears to surround the post financial year-end timeframe within which BISX-listed companies must hold their AGMs.

Hillary Deveaux, the Securities Commission’s executive director, yesterday said he would have to “check” the matter when contacted by Tribune Business.

Public companies must file all their AGM documents with BISX and the Securities Commission, and Mr Deveaux said the latter had delegated authority in many areas to the stock exchange.

Keith Davies, BISX’s chief executive, did not return Tribune Business’s call seeking comment, but this newspaper was informed by one public company that the exchange was pushing for it to hold its AGM by end-June - six months after its financial year-end.

It is unclear whether timeframes by which an AGM must be held are specified in BISX rules.

Bank of the Bahamas’s director issues are likely to be related to efforts by the Government to reconfigure the Board, following a campaign mounted against the bank by a tabloid newspaper.

Bank of the Bahamas International’s current chairman is former auditor-general, Dr Richard Demeritte. Attorney Rawson McDonald is deputy chairman, and other directors are Quality Home Centre president Don Davis; NIB chairman Father James Moultrie; Bahama Grill Cafe owner Eric Gibson; attorneys Rodger Minnis and Donna Harding-Lee; Errol McKinney; and Bishop Roston Davis.

The Board changes are being contemplated as Bank of the Bahamas international, like all other commercial banks, grapples with deteriorating quality in its total loan portfolio.

As at June 30, 2013, Bank of the Bahamas International had 10,007 outstanding loans worth a collective $753.046 million. Some $118.926 million, or 16.18 per cent of the total, was then non-performing or 90 days at least past due.

However, data contained in the bank’s annual financials shows loan quality among its $469.08 million worth of ‘good credit’ significantly worsened between 2012 and 2013.

Credit deemed ‘satisfactory risk’ fell by more than 50 per cent, from $331.401 million to $152.436 million, while ‘watch list’ credit almost doubled - from $86.063 million to $170.218 million.

‘Sub-standard, but not impaired’ loans increased by a similar amount - from $75.84 million in 2012 to $146.427 million at 2013 year-end.

Mr McWeeney yesterday declined to comment on market speculation that the Government, via NIB, is set to inject more capital into the bank.

“I can’t comment on that. Not at all,” he said.