Turnpage

Please visit our sponsors

RSS Feed
 

Current News & Press

 

Advertisement

The Bahamas Investor

News & Press Archives

 
The Bahamas Investor on facebookFollow The Bahamas Investor on TwitterSubscribe to RSS feeds from The Bahamas Investor
HOME > 
News & Press > 
BOB earnings down due to expanded reserves

Bank of The Bahamas' slightly lower-than-average earnings were triggered by a deliberate action to set aside $4.4 million of new operating profits to loan loss reserves, according to managing director Paul McWeeney. 

Source:
Date:
Updated:
TheBahamasInvestor.com
Tuesday, July 17, 2012
Tuesday, July 17, 2012

Bank of The Bahamas (BOB) reported nine-month earnings this week that included total assets of $848 million, a prediction of stronger earnings ahead and year-to-date net income of $2.8 million.

The slightly lower-than-average earnings were triggered by a deliberate action to set aside $4.4 million of new operating profits to loan loss reserves as a buffer against economic challenges, a measure that resulted in a $389,000 loss in the third quarter ending March 31.


“Given the inconsistent signals about the economy, we chose a path of extreme care and conservatism, setting aside an additional $4.4 million in loan loss reserves so as to improve internal insulation against any unrecognized risks and potential future economic shocks,” said BOB managing director Paul McWeeney.

Had the bank not taken the loan loss provisions, says McWeeney, BOB’s net earnings would have stood at $7.2 million for the first nine months of the fiscal year that began July 1, 2011.

McWeeney called the sizeable provisions reserve “the prudent thing to do” to protect BOB, shareholder value and ensure that regardless of economic roller coaster dips and peaks, BOB’s financial position would be strong. The bank has consistently maintained higher than required reserves that have allowed it to retain a strong and solid financial footing.

According to the interim report, BOB showed total assets of $848 million with equity of $117 million. Risk weighted capital ratio stands at what was described as “a healthy 22.3 per cent,” a substantially higher percentage than required by regulators.

Net interest income of $26.8 million rose slightly year-over-year and there was little change in income from fees and commissions, though the bank is moving toward greater earnings from non-interest revenue by providing services to customers and wholesaling processing fees to other institutions as the singular provider in the country of both an e-commerce platform and in-house processing of credit card transactions.

Both of those innovative measures that required extensive capital investment and major retraining exercises for all 380 plus staff members along with the bank’s broad community outreach helped make BOB the “Best Bank in the Country,” for the fifth time since 2006, according to Euromoney magazine. The award was announced July 5 in London.

“While additional loan loss provisions are expected for the remainder of the fiscal year it is anticipated that profits will advance during the final quarter (ended June 30),” said McWeeney. “By that time, the bank will have substantially completed its strategy, deliberately designed to recalibrate its financial structure to better operate within the ‘new norm’ of the general economic arena.”

Barring unforeseen events, he noted, BOB anticipated an increase in net income levels over the medium term and a return to pre-recession levels and beyond long-range.

Minister of Tourism Obie Wilchcombe says that The Bahamas should focus on marine tourism to get a better return on promotional investment. Watch a ZNS news report here.

Minister of Social Services and Community Development Melanie Griffin will head a Bahamian delegation to the United Nations in New York this week.

The Bahamas Investor
Administrative Links
  


  © 2017 ETIENNE DUPUCH JR PUBLICATIONS LTD