The Tribune

EDITOR, The Tribune.

Business Editor Neil Hartnell has given an excellent review of the circumstances surrounding Government’s action in rescuing the Bank of the Bahamas and I agree that it was the only feasible step to avoid a greater financial catastrophe (November 2). However, I would like to differ on a couple of points.

First, I think there is no doubt that the $100 million of Resolve promissory notes must be regarded as Government debt, and will be so considered by the rating agencies. The notes are now held as assets on the Bank’s balance sheet; how else can they be described other than as Government-issued or guaranteed securities?

Second, I do not think the minority shareholders will enjoy any kind of bonanza. Yes, immediate net worth has been restored and most depositors are protected by deposit insurance. But shareholders can only do well if they see some prospect of growth and, in my opinion, the bank has lost so much credibility that growth is difficult to foresee without radical restructuring, such as sale to a private owner.

The $5.22 BISX share price is a meaningless figure when the shares are illiquid in the absence of buyers.

It should certainly be a stormy AGM. Minority shareholders have no legal right to elect directors, but they can make enough public noise to force Government to accept their demands. After all, they are voters too.

RICHARD COULSON

Nassau,

November 3, 2014.