Prime Minister Perry Christie speaks at the press conference yesterday. He is flanked by, from left, Bank of Bahamas Managing Director Paul McWeeney, Minister of State in the Ministry of Finance Michael Halkitis and Governor of the Central Bank Wendy Craigg. (BIS Photo)
By RASHAD ROLLE
Tribune Staff Reporter
rrolle@tribunemedia.net
PRIME Minister Perry Christie yesterday announced a plan to help the struggling Bank of the Bahamas by establishing Bahamas Resolve, a new state-owned and controlled company that will assume liability for $100 million of BOB’s non-performing commercial loans.
This move comes after BOB incurred losses in the past two years, with its most recent quarterly report noting that its shareholders incurred $4.172 million in “red ink”.
A new report for the latest quarter was expected to be released last night.
The government believes the establishment of Bahamas Resolve will mitigate against bad credit risks, improve the bank’s revenue prospects and enhance its shareholder value and financial condition.
No funds from the public treasury and National Insurance have been used in connection with the assignment of the loans to Bahamas Resolve, said Mr Christie.
He added that BOB is now compliant with capital and liquidity requirements of the Central Bank and international standards because of the implementation of Bahamas Resolve.
In the past, BOB has been accused of giving out multi-million dollar unsecured sums to politically-connected Progressive Liberal Party (PLP) supporters.
However, Paul McWeeney, managing director of BOB, said yesterday that none of the troubled commercial loans that will be assigned to Bahamas Resolve involve “politically exposed” persons.
“Of the loans being transferred from the Bank of the Bahamas to Resolve,” he said, “none include any loans outstanding to what I’d call politically exposed persons. The total outstanding loans of such persons constitutes a comparatively small percentage of total outstanding loans.”
Officials blamed BOB’s troubles on the 2008 recession, which caused numerous borrowers to experience difficulty repaying their loans, thereby affecting the profitability of the bank.
State Minister for Finance Michael Halkitis said that in comparison to BOB, however, Bahamas Resolve will have greater opportunities to collect payment on overdue loans by using “every commercial, financial and policy mechanism available to it.”
He added that in the event that Bahamas Resolve realises 100 per cent of the assets it targets, steps will be taken to dissolve the company.
Nonetheless, a government press release yesterday said the plan is for Bahamas Resolve to be in operation for 10 years, following which the government “will reevaluate the value it has realised from the debt portfolio, examine Resolve’s financial situation and determine a way forward.”
The statement added that the government consulted with the Opposition on the matter “in a spirit of national unity, national interest and non-partisanship”.
According to officials, directors of Bahamas Resolve will be appointed by the Ministry of Finance and within days a private accounting firm experienced in managing non-performing loan portfolios will begin managing the company.
Mr Christie said: “The government’s actions are not fundamentally dissimilar to state-led restructurings that were done or accommodated for a number of banks in the more developed economies of the world…in the wake of the 2008 recession.”
He added that BOB will also undertake restructuring actions of its own to “re-align and re-balance the bank’s business model towards more retail banking, consumer lending and e-banking products.”
To this end, Mr McWeeney said steps are already being taken to improve the bank.
“Consistent with this new effort,” he said, “the bank is piloting a placement card system for Social Services as well as the general civil service for travel purposes. Internally, important initiatives have been implemented to positively impact the culture, improve customer service and enhance governance and accountability. The bank is seeing the benefits from a revamped sales and service apparatus, a strategic separation of certain back and front office functions and a more defined organisational structure.”
Mr Christie said BOB’s Board of Directors has been directed to assess its management and cost structure, and to submit recommendations to the government concerning management and administrative reorganisation before the end of this year.
Comments
TalRussell 10 years, 1 month ago
This is not funny at all when even the media and opposition politicians never asked about the $100 million BOB's cash shortfall? \What did they really know and for how long? Didn't red Chairman run that bank once? For being the Comrade Managing Director of the financially troubled BOB, Comrade McWeeney seems in past to have surprisingly had little knowledge when asked by media and opposition politicians about loans involving the same 'politically exposed persons?' Why concern yourself with the loan practices of 'people's bank,' when the thinking at BOB is it only constitutes a comparatively small percentage of total outstanding loans? Comrade McWeeney it is the names of the individuals on those very 'not repaid back BOB' loans and the lack of security placed as loan collateral that worries hell out taxpayers? Maybe a million dollars here and a million there is comparatively small in yours and the PM's mind but not to the thousand of families pushing their Super Value shopping buggies up to the checkout registers, all but empty of groceries. Where meat is now considered a luxury food item, only be bought when them special guests be's coming over dinner.
realfreethinker 10 years, 1 month ago
When they arrested Mr Cash didnt they say the bank was doing fine.what happened since that. O the lies they tell
duppyVAT 10 years, 1 month ago
Another example of a government related institution that has gone belly up. $100 million in bad loans ........... in The Bahamas? Thats bad. Paul McWeeney and BOB Board should be held accountable for this big time. But the PLP wont do that to one of da boys.
concernedcitizen 10 years, 1 month ago
This is the new development bank ,,now a bunch of cronies will get paid to be directors of Bahamas resolve ,,The debt stinks so bad no company would buy it at a discount ,,This is a company that will select which debt to go after ,,it is actually stealing 100- million plus of our money ,,at least we got ,roads ,ports the previous government etc from these guys we just get the shaft and some fancy talk and a 9 to 15 million street party ..LET THE GOOD TIMES ROLL
ThisIsOurs 10 years, 1 month ago
Why is Mr McSweeney even there to give any input on the new kick the can down the road initiative? He has more reason than Renward to tender his resignation. Why is Wendy Craig so far removed literally and figuratively from these plans cooked up by friends of friends? She is in a tough spot, all she must see around her is absolute foolishness, and people using her name to validate their asinine plans. Who is considered a politically exposed person in this country? Someone who ran for office? Or someone who has a close personal friendship with the PM. Would Flowers or Sebas be politically exposed? So many questions and so juch obfuscation..
BahamaPundit 10 years, 1 month ago
I was insulted when the PM compared this to the US bailouts. This isn't even close:
The US bailouts were due to sub-prime mortgages, which everyone at the time in the industry thought were a sustainable product. We have no idea what the BOB loans consisted of -- were they even secured? Did they just hand out cash and call it a loan?
The US banks that were bailed out were considered too big to fail, because they would jeopardize the entire US economy. BOB is hardly too big to fail. It could go under and most people would hardly notice.
The US has the world's largest economy and can afford to bail out failing institutions. The Bahamas' economy is diminutive and on the verge of collapse. It cannot afford such a grandiose endeavor as bailing out a bank to the tune of 100 mill.
It's also insulting that they used a propaganda name like "Bahamas Resolve." This has nothing to do with the Bahamas. Name it the Dirty Politician Resolve. Don't sully the Bahamas' name with your nefarious schemes.
I beg the Press to look into every aspect of this deal, as it stinks to high heaven. What will happen to the 100 million dollars of bad loans? Will taxpayers have to foot the bill? Why was there so much secrecy and deception around BOB's failings? They even called the Punch a liar, when they were telling the truth. What was the exact amount of bad loans lent to politically exposed persons? This is a dark day for both political parties, as their true colors have been revealed to the world.
Sickened 10 years, 1 month ago
Wow! You must be by twin. You took the words right out of my mouth. This stinks like a rotten rat. No government will ever call for a commission of enquiry on this because they both use BoB as a slush fund. I had better read tomorrow that McSweeney has resigned and the board has been replaced.
SP 10 years, 1 month ago
"Paul McWeeney, managing director of BOB, said yesterday that none of the troubled commercial loans that will be assigned to Bahamas Resolve involve “politically exposed” persons."
........................................................T R A N S L A T I O N..........................................................
Members of the good old boys club and politicians will never be required to pay back anything!
asiseeit 10 years, 1 month ago
Drastic action will be needed to make these politicians understand that The Bahamian people are done being hoodwinked and STOLEN from. I can hardly afford to live week to week and these thieves are talking about 100 million dollars of OUR money. The simple fact is once again the buffoons in government have FAILED, as usual. We are governed by complete assholes who have no clue how to govern in an honest, fair, or effective manner.
Sickened 10 years, 1 month ago
How much rope do we need to hang all of these crooked politicians???
pablojay 10 years, 1 month ago
In any other country or financial institution , this article would have said,"Paul McWeeney, FORMER managing director BOB." Alas,this is the Bahamas, the PLP. I wish i had no shame like him,see how haughty he looks in that picture,he is probably saying thank God because of me it is only $100 million .WOW!
TalRussell 10 years, 1 month ago
Comrades thanks to PM and da taxpayers Bankers, we have now learned two brand new catch phrases and that's whether they's sits well taxpayers or not. What exactly in the hell does 'Bahamas Resolve' and 'Politically Exposed,' supposed to mean to average man's and woman's on Bahamaland's streets? What the average man's and woman's is smart enough not let get by them, even if you have Comrade Sister Wendy all positioned standing alongside very people who allowed these 'politically exposed' loans, is that the most common reason behind a bank's bad loans, does arise from bad lending policies. That bad lending policies amount to bad management. That political appointments to run people's banks is never smart idea. Why hasn't the media not demanded that Comrades PM, McWeeney, Wendy and Halkitish, do more than pose in some photo, to tell people who in hell is on list of the 'politically privileged - all rising above heads man's and woman's on the street, who don't even understand, how one qualifies reach heights of the be 'politically exposed?' The people would understand, if 'resolved' means some 'politically exposed' might be given the test to see. if just maybe it could be 'resolved' for some 'exposure' to one them overcrowded cells up at Her Majesty's Fox Hill Prison?
The_Oracle 10 years, 1 month ago
The shareholders are all "good old boys and politically connected" Therefore, the move to "bail themselves out" is purely political and akin to insider trading and subsidy. Average Bahamians better start waking up to the harsh realities these fools and crooks will not face as they have left to join their foreign assets!
Rinks 10 years, 1 month ago
This is a bunch of bullshit I have to go in this place week to week to pay my mortgage back and these damn sorry excuse for leaders can borrow money and don't pay it back.but me the small man has to pay his bill back and also pay their bill back to.this prime minister and the PLP full of shit.cant find money to save the ordinary man and his family but we can pay of our boys loans.bunch of jack asses
duppyVAT 10 years, 1 month ago
All of you who have loans at BOB should stop paying them and let the PLP ole boys club that seem to be gorging on OUR public money finish pay off the loans and close that sorry ass bank down for good. I am disappointed in the CB boss Craig ............. this is an egregious act against tax payers.
Sickened 10 years, 1 month ago
All Bahamians should help BoB (close down) and the Bahamian taxpayer by moving your mortgages and taking out all your cash from BoB.
The people have the power to shut down this criminal enterprise. NOW DO IT!!!
mangogirl01 10 years, 1 month ago
This is a bunch of bull shit to the highest ever done! All management has been doing over the years is giving themselves huge salaries and bonuses and the loyal, hard working staff only get peanuts. Why would a bank with less than 400 employees hired a hundred consultants (figuratively speaking) who all have retired from their careers from other banks such as Royal, Scotia and Commonwealth? Why have the foreign consultant hired to give an overview of the living large at the One and Only Club on Paradise Island.They have no loyalty to BOB and are only there for the additionally salaries that they are getting! Senior management stinks and needs to be rolled out, all of them! Why does BOB need a MD, COO, four DMD, all who are making over $200,000 plus perks and benefits, who should have run the bank better but no, now that the shit has hit the fan, they are blaming it on the recession and the economy! All of them needs to go as it is obvious that they were not doing their jobs over the years! This is why the Bank cannot make any money, it is way too top heavy with bull shitters and consultants who don't know what the hell they are doing!
ThisIsOurs 10 years, 1 month ago
That says it all. A bunch of people at the top need to go.
Well_mudda_take_sic 10 years, 1 month ago
4 MONTHS AGO I POSTED THE FOLLOWING COMMENT ON THIS WEBSITE: "McWeeney is telling all stakeholders in BOB to brace themselves as BOB's financial condition and results of operations for its fiscal year 2014 will be much worse than the previous fiscal year. This is a very bitter pill for many to swallow given BOB's very poor state of affairs as reported in it audited financial statements for fiscal year 2013. By BOB's own admission in footnote 7 to those financial statements, only $152.4 million (2012: $331.4 million) of its total loans of $735.1 million (2012: $687.6 million) were considered to be a "satisfactory risk". All other loans were either past due or impaired as of June 30, 2013. Footnote 7 to last year's audited accounts also disclosed that this situation existed after having already written-off loans totalling $17.2 million and having already made additional provisions for further possible write-offs totalling $21.2 million (one can only wonder how many of these loan write-offs involved politically connected borrowers!). Restructured loans for fiscal year 2013 also increased by 56% compared to the previous year. The very significant deterioration in the quality of BOB's loan portfolio was further evidenced by the very significant spike in non-accrual loans as a percentage of total loans and total equity (non-accrual loans are poor risk loans for which no interest can be accrued as earned). Meanwhile footnote 24 to BOB's audited accounts for fiscal year 2013 disclosed that directors' fees had increased by 51% compared to the previous year and loans and advances had been made management at a low average interest rate of 2.6% per annum. To help BOB in fiscal year 2013, Christie, Gibson and McWeeney arranged for $32 million of National Insurance funds belonging to the hardworking people of this country to be injected into BOB as additional needed capital. With McWeeney warning us that BOB's financial situation for the coming fiscal year 2014 will be much worse than 2013, one can only wonder how much more of the peoples hard earned National Insurance money will be ploughed by Christie and Gibson into BOB to support its practice of making loans to politically connected persons that frequently are defaulted on and later written-off according to recent revelations in the local press."
observer2 10 years, 1 month ago
If only $152m of $735m of loans are OK then there is a gap of approx $600m. With Resolve Bahamas only taking $100m of BoB's books then that leaves a gap of $500m!
Someone needs to take a forward look at BoB's capital base to determine if the Bahamian public may need to inject further capital into the bank to secure depositors. National insurance can't do it alone as these monies are need for pension payments.
BoB risk is bringing drip feed to the public.
Well_mudda_take_sic 10 years, 1 month ago
THE SITUATION I ENVISIONED 4 MONTHS AGO (SEE MY EARLIER COMMENT ABOVE) HAS TURNED OUT TO BE INFINITELY WORSE THAN I COULD HAVE EVER IMAGINED. MANY MILLIONS OF DOLLARS HAVE BEEN STOLEN BY POLITICAL FRIENDS AND BUSINESS CRONIES OF CHRISTIE THROUGH THE CORRUPT LENDING PRACTICES OF BOB, A BANK MAJORITY OWNED BY THE GOVERNMENT FOR WHICH CHRISTIE HIMSELF AS PM AND MINISTER OF FINANCE HAS SAY, SWAY AND COMPLETE RESPONSIBILITY FOR EVERYTHING THAT GOES ON AS A RESULT OF HIS APPOINTMENT AND/OR RETENTION OF HIS VERY OWN PUPPETS TO RUN THE BANK!!!!!!!! NOW CHRISTIE HAS THE SHAMEFUL TEMERITY TO HEAVE THE MEGA MILLIONS IN LOANS DEFAULTED ON BY HIS POLITICAL FRIENDS AND BUSINESS CRONIES, LOANS THAT HE HAD A HAND IN ORCHESTRATING AND APPROVING IN THE FIRST PLACE, ONTO THE BACKS OF THE STRUGGLING BAHAMIAN PEOPLE VIA A BOGUS ENTITY THAT HE HAS DECIDED TO CALL "BAHAMAS RESOLVE." THE ONLY "RESOLVE" CHRISTIE HAS EVER HAD IS FOCUSED ON AIDING AND ABETTING THE RAPE, PILLAGE AND PLUNDERING OF THE BAHAMIAN PEOPLE BY HIMSELF, HIS POLITICAL FRIENDS AND HIS CORRUPT BUSINESS CRONIES.
Reality_Check 10 years, 1 month ago
Simpleton Christie and his duplicitous accomplices (Paul McWeeney and Wendy Craigg) obviously decided it is better to give all Bahamians the royal shaft rather than just a subset of Bahamians like the depositors/creditors of BOB or the contributors to the National Insurance Fund (the NIB is a major shareholder of BOB). It really defies logic that as recently as last year, Christie as PM and Minister of Finance and Shane Gibson as Minister with responsibility for NIB, decided to increase NIB's shareholding in BOB by injecting $32 million of capital funds notwithstanding the known but unbooked mega millions of loan losses within BOB's loan portfolio. THIS WAS A ROYAL BREACH OF TRUST PERPETRATED ON THE INTENDED AND RIGHTFUL BENEFICIARIES OF NIB's TRUST FUNDS BY PERRY "VOMIT" CHRISTIE, "SHAMELESS" SHANE GIBSON, "DUFUS" PAUL McWEENEY AND "SPINELESS" WENDY CRAIGG. THIS BREACH OF TRUST IS ONLY AMPLIFIED BY THE BREACH OF TRUST THESE INDIVIDUALS NOW SEEK TO PERPETRATE ON THE BAHAMIAN PEOPLE AS A WHOLE THROUGH THE CREATION OF A BOGUS ENTITY LABELLED "BAHAMAS RESOLVE" WHOSE ONLY BENEFICIARIES IN THE MAIN WILL EVER BE FAVOURED CORRUPT POLITICAL FRIENDS AND EQUALLY CORRUPT BUSINESS CRONIES OF NONE OTHER THAN PERRY "VOMIT" CHRISTIE!!!! OF COURSE VOMIT WILL SHAMELESSLY CLAIM: "BUT HUBIGITTY WAS A CROOK IN THE SAME WAY TOO, SO I AM JUSTIFIED IN BEING SIMILARLY CROOKED!" THEREIN LIES THE LAMED BRAINED LOGIC OF CHRISTIE!!!!!
ThisIsOurs 10 years, 1 month ago
PERRY "VOMIT" CHRISTIE, "SHAMELESS" SHANE GIBSON, "DUFUS" PAUL McWEENEY AND "SPINELESS" WENDY CRAIGG
Wow:)
Well_mudda_take_sic 10 years, 1 month ago
No prior mention made of Michael "Bend Over" Halkitis because just about everyone now knows where he likes to take it whenever the PM chooses to give it to him! Halkitis will forever be the proverbial subservient idiot....much like "Spineless" Craigg.
ThisIsOurs 10 years, 1 month ago
Halkitis is really bright:) I don't know that he makes a great politician, but much like Craig, his name is used to give credence to the PM's bird brain ideas. Neither of them have the character to stand against the tide.
ThisIsOurs 10 years, 1 month ago
Mrs Arnette Cash deserves an apology from PGC. Anyone who attempted to expose this foolishness needs a thank you from the Bahamian people.
Well_mudda_take_sic 10 years, 1 month ago
Bahamian businesses now have every right not to register for VAT as the Christie led government has essentially admitted that this new tax is being sought for all sorts of nefarious reasons other than paying down our National debt. Revenues from VAT are destined to be squandered in the direction of the favoured few by corrupt schemes of one kind or another like the corrupt lending practices of BOB that have gone on for years under the watchful and approving eyes of both the Christie and Ingraham led administrations. Now we know why these two evil men have never served as PM without also serving as Minister of Finance. They and their cohorts are corrupt to the core!
ohdrap4 10 years, 1 month ago
Said this is ours:
Not that far. Isn't that her looking on in the background wearing john rolle's suit?
ThisIsOurs 10 years, 1 month ago
But look how far she's standing from the rest of them..."sometimes" positioning like that says a lot, "sometimes". I can't believe as brilliant as she is that she supports anything the PM is proposing on this or on gaming. Her problem (my opinion) is, she's been trying to bide her time and keep her head low for two years and now she's fighting to dig her way out of the s$@& they piled on top of her
concernedcitizen 10 years, 1 month ago
Remember when Ingraham struggled w/ the recession they said there was no recession ,,at least we got roads ,ports ,airports ,hospitals ,w/ these clowns we got the numbers man ,stem cells for nygard , a building in the bush called Bamsi and another billion on the debt ,,Papa is looking better and better even though he is a lil crazy ,so was Churchill ..lol
duppyVAT 10 years, 1 month ago
Amen!!!!!!!!!! This crew will put us in a Depression cuz they teef too much
RTStorm 10 years, 1 month ago
It is absolutely clear this government is nothing more than a band of professional thieves, bandits and top class pimps. “Thieves” because they find all manner of ways (at a national level) to line their pockets or secure themselves financially, at the expense of the Bahamian people. “Pimps” because they seek to have Bahamians prostitute themselves with this Carnival Street party for a quick dollar. Agreed - businesses should NOT register for VAT or any new form of taxation until systemic corruption, and this sham of a government, are all gone.
ThisIsOurs 10 years, 1 month ago
No accounting for carnival either. They've probably already spent 20 million, how would we know?
mangogirl01 10 years, 1 month ago
The PM needs to stop talking and put his foot down hard and fire BOB's Board of Directors and executive management! Only then we may see some light at the end of the tunnel but I believe it's already too late to save the Bank!
ThisIsOurs 10 years, 1 month ago
Exactly!!! The replacement of the entire board should have been announced with this same statement and it should have been worded, on recommendation of the Central Bank as the regulator and in the interest of the Bahamian people....
This board has proven themselves worthless. The biggest insult is seeing Paul McWeeny next to the PM, the 2nd biggest insult is that he was allowed to speak. Who can trust any advice he has to give?
Emac 10 years, 1 month ago
Alas, we continue to elect leaders who do not have the guts to get rid of incompetent people who they put in charge, even after these people allow everything under their supervision to go amuck We continue to elect leaders who insist on putting their friends, some of whom are old fogies, in key positions. We continue to elect leaders who rob the country blind while its citizens stand by do absolutely nothing. We continue to dress up in these dam red and yellow themed clothing every election and party like the past five years were something to celebrate.
As Einstein puts it, "Insanity is doing the same thing over and over again and expecting different results." This simply means that the majority of Bahamians belong in an asylum! Lest we forget, Papa Doc did the same thing to Haiti many years ago. The Haiti we see today is the results of thieving leaders. Is that where the Bahamas is heading?
ED 10 years, 1 month ago
Every week we learn of another grand scewup by these idiots. The level of corruption and its acceptance by the Bahamian public is truly sickening. Truly sad. Right in front of our own eyes, they are sucking this Bahamaland dry. It hurts to see it happening and know that no one will do anything about it. BEC disgrace,Wells LOI issue, Customs corruption, PMH dysfunction, No FOI, Missing $$ at every turn, Crime is out of control and so many other issues too numerous to count.
No one will be held accountable for this BOB mess or anything else, as history has shown us. We need to see people be held accountable for their wrongdoings, be they PLP or FNM, family or not. To get this country on track, we need to start with getting our morals and values right. If we the citizens do not demand better of our politicians, they will continue to suck us dry - greedy VAMPIRES! Everything in the hands of our government is a FAILURE! Now they are threatening us that we MUST pay VAT! We know FULL WELL what will happen with those funds. We don't TRUST our government(s)! While we count our coins to live day to day, hoping for a better life one day, politicians bank accounts will continue to grow with our money. No wonder they always smilin!
Well_mudda_take_sic 10 years, 1 month ago
A vote of no confidence in our thieving government can only be achieved by all Bahamians refusing, to the maximum extent possible, to put another dollar in the government's coffers, whether it be by way of VAT, customs duty, real property tax, stamp tax, payments to BEC, Water & Sewerage and BTC, etc., etc. The UK Government (QE II) needs to be brought into the equation through mass public demonstrations of the Bahamian people aimed at keeping the crooks from sitting in parliament while we agitate for the appointment of a Royal Commission of Inquiry to hold Christie, Ingraham and others accountable for aiding and abetting the pillage and plundering of the Bahamian people over the past decade or so. Lady P will have to be moved out of the way of course. Rumours abound that some Bahamians are now so fed up that they are openly discussing the possibility of fixing our country's plight by simply paying $1,000,000 or so to a suitably equipped and well trained ex-Navy Seal marksman team (now turned mercenaries) who are well known for hitting their political targets with a single fatal shot 9 out of 10 times from a distance of almost 2 miles!
ThisIsOurs 10 years, 1 month ago
I agree (except for the last part), we do need a commission of inquiry. Too much theft is happening. This is hydra, cut off the head and it grows another, there are plenty crooks on either side waiting for Perry to fall. We need to attack Crookedness , not an individual.
happyfly 10 years, 1 month ago
Dollar devaluation..............here we come !!!!!!!!!!!
afficianado 10 years, 1 month ago
This government is radioactive lol.
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