The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Bank of The Bahamas more than tripled the value of recovered loan collateral to $3.5m during its 2022 financial year as a result of intensified focus on reclaiming distressed assets.

The BISX-listed commercial lender, in its just-released 2022 annual report, acknowledged its success was up against relatively low recovery comparatives from the prior year. “BOB’s delinquency management unit contributed significantly to the Bank’s $11.8m net profit this year as new strategies and automated delinquency management processes helped the unit achieve year-over-year increases of 221.22 percent in loan recoveries and special activities,” the bank said.

“Net credit loss expense consists of total credit loss expense of $6.4m reduced by $5.1m in recoveries. This credit loss expense was $5.3m or 45.28 percent lower than the prior fiscal year primarily due to efforts on remediation and improvement of loan status and recoverable values.

“Total recoveries during the year were $3.5m or 221.22 percent higher than prior year, mainly because of property sales on charged/written-off facilities and restructures. The bank allotted significant resources on its credit risk management and loan collection efforts resulting in improved overall delinquency management.”

Brea Braynen, corporate manager with responsibility for the delinquency management unit, told shareholders via the annual report: “We ensure that a strategy is developed prior to an account going non-accrual loans. Assessments are conducted on customers to determine if there is opportunity to regulate accounts, and where this is not possible, the customers are pursued via legal action.”

Non-performing commercial loans, which were subsequently transferred to the Bahamas Resolve vehicle, were responsible for the two taxpayer-financed bail-outs of Bank of The Bahamas over the past decade plus a $40m rights issue.

The BISX-listed institution is now seeking to put that behind it, as it signalled in its annual report. “The Bank of The Bahamas has been able to substantially conquer the challenges that were brought on by the pandemic,” it said. “The bank has yielded positive results such as excess liquidity, strong capital positions and return to profitability.

“During the current fiscal year, the bank has embarked on several initiatives to provide more sustainable growth opportunities both operationally and financially. As the bank continues its journey to rebuilding its brand, it remains steadfast in providing new and innovative banking solutions, as well as creating a safe and healthy environment for both customers and staff.

“The collective efforts of the team at Bank of The Bahamas have generated unequivocal results for the year ended June 30, 2022. The bank’s net income of $11.8m is $8.1m or 216.43 percent higher than prior year’s net income of $3.7m. Also noteworthy is the decrease in the bank’s net impairment losses by $4.4m or 92.53 percent compared to prior year.”

The annual report continued: “Deposits from customers and banks, which account for approximately 93.19 percent of total liabilities, increased by $64.1m or 9.22 percent from $695.9m as at June 30, 2021, to $760m as at June 30, 2022. The bank noted significant increases in savings and demand products, while term deposits reflected a decrease during the year.

“In the aftermath of the pandemic, the customer base is more inclined to having their funds readily available and businesses are geared towards better management of cash flows. The overall positive variance in deposits was supplemented by the increase in other liabilities due to timing of the remittance of funds from the Government-guaranteed hurricane loan collections and higher prepaid card holder liability to social services, as there was an increase in the benefit amount and an increase in the number of persons receiving the benefits.”