The Tribune

By YOURI KEMP

and NEIL HARTNELL

Tribune Business Reporters

Bank of The Bahamas (BoB) is open to strategic partnerships, the deputy prime minister said yesterday, as the institution suffered a 75.2 percent profits decline for its 2020 financial year’s first quarter.

Speaking outside the Accountants Week conference, K Peter Turnquest said Bank of The Bahamas, which is 82.6 percent owned by the government via the Treasury and National Insurance Board (NIB) “would have had an even bigger profit” were it not for the provisions taken to cover a $6m claim launched by a former Cabinet minister’s family and their business partner against it

“We expect that case would be satisfied, [and] that would result in increased profitability for the bank,” Mr Turnquest added. “The bank does not want the government to curb their investments, and the government is open for partners and third parties in that regard.”

Mr Turnquest did not specify the nature of the partners or partnerships that the BISX-listed institution is seeking, but said: “Bank of the Bahamas is doing very well, and we are very pleased with the progress we are making. We are pleased with the management and pleased with the Board.”

His comments came after Bank of The Bahamas’ profits fell by three-quarters year-over-year to $487,404 for the three months to end-September 2019 as opposed to $1.966m for the comparative period in the prior year.

Net interest income was ahead of the 2018 first quarter by almost $1m, standing at $7.699m, and with fees and commissions also up, total operating income finished at $10.616m compared to $9.802m the year before.

However, loan loss provisions more than doubled to $2.656m due to provisions related to Hurricane Dorian, while operating expenses were higher by some $700,000.

Tribune Business also previously revealed how Bank of The Bahamas has defeated the bid to enforce the $6m default judgment against it despite being branded “careless and negligent” in its approach to the case.

Stephana Saunders, the Supreme Court’s deputy registrar, found that there was sufficient “merit” in the BISX-listed institution’s defence to set aside the default judgment obtained by companies 50 percent owned by the family trust of Damian Gomez, former minister of state for legal affairs, with the balance held by the Jennette family trust.

Bank of The Bahamas, in unveiling its 2020 first quarter results, confirmed Mr Gomez’s previous assertion that the latter had lodged an appeal against the ruling on October 22, 2019. The BISX-listed institution, in the meantime, filed its defence to the claim as required on October 25.

“The related provision is maintained in the financial statements,” Bank of The Bahamas said. “The bank has filed the necessary applications to set aside the default judgment, and to set aside the said damages.

“The bank has also filed papers to stay the enforcement of damages and, in certain circumstances, to strike out enforcement steps. Management considers that adequate provision has been made in these financial statements for any loss that might ultimately be determined.”

Elsewhere little has changed, with Bank of The Bahamas’ non-performing loans equivalent to 25.78 percent or more than a quarter of its net credit book, and representing a slight increase on the 25.37 percent at end-June 2019.

Kenrick Braithwaite, Bank of The Bahamas’ managing director, focused on the positive in his message to shareholders. “After five years of consecutive net losses, the bank returned to profitability during its fiscal year 2018, continued in the fiscal year 2019, and during this current fiscal year 2020, the bank recorded net income of $0.5m for the first quarter ended September 30, 2019,” he wrote.

“Our focus remains providing more sustainable growth opportunities to ensure the bank’s success over the long-term, and to build a brand that restores trust, empowers customers and promotes responsible banking.”

Turning to the specifics, Mr Braithwaite added: “The positive variance in net interest income was primarily due to an increase in interest revenue by $0.6m, primarily from consumer loans interest income as a result of the Bank’s consumer loans campaign, and lower interest expense by $0.3m due to certain interest rate reduction and the continued shift in the deposit portfolio composition from higher yielding to lower yielding deposit products.

“The bank recorded increases in its operating expenses by $0.8m or 11.24 percent, parallel with its initiative to support the planned growth.”