Please visit our sponsors

RSS Feed

Current News & Press



The Bahamas Investor

News & Press Archives

The Bahamas Investor on facebookFollow The Bahamas Investor on TwitterSubscribe to RSS feeds from The Bahamas Investor
News & Press > 
BOB starts year with robust capital

The Bank of The Bahamas is heading into 2014 with shareholder equity topping $138 million and a robust capital position of 22 per cent. 

Tuesday, January 14, 2014
Tuesday, January 14, 2014

The Bank of The Bahamas (BOB) is heading into 2014 with shareholder equity topping $138 million and a robust capital position of 22 per cent, well above local and international requirements, according to published financials.

According to the bank’s managing director Paul McWeeney, the strong capital position means BOB is well-prepared for more stringent international banking standards known as Basel III that will take effect over the next several years.

Created by the Basel Committee on Banking Supervision, the tougher requirements are aimed at building stability throughout the financial services system following the economic downturn.

The Basel III accord states that banks must convert preference shares into common or ordinary shares, enabling them to maintain a liquidity ratio of 8 per cent of total assets. The Central Bank of The Bahamas has taken an even tougher stand, requiring between 14 per cent and 17 per cent of risk-weighted assets.

By a capital infusion of $31.5 million, BOB is well ahead of local and international requirements in its capital position with 22 per cent.

However, the bank’s managing director says, the cash infusion that facilitated the buy-out of bonds and preference shares has caused some confusion in the marketplace, though BOB has not been alone in making such a move.

“In order to understand what we did and why we did it, one must have an appreciation for the regulatory regime which governs banks not only in The Bahamas, but also worldwide,” says McWeeney.

“We deliberately took steps to ensure that our capital structure continued to meet the highest standards. Counterbalancing payouts of bonds to our major shareholder was an injection of ordinary capital, paving the way for us to reduce preference shares in favour of ordinary shares over time. This move represents a sensible, prudent and proactive step that any responsible organization such as ours would take.”

BOB recently marked its 25th anniversary, noting its growth from some $90 million in assets in 1988 to nearly $1 billion.

“In BOB’s quarter century of existence, the bank has demonstrated that with the right mindset and careful leadership a small local organization can thrive in a competitive space against time tested global giants,” says McWeeney.

“The bank continues to chart its course of sound growth and development rapidly approaching a new landmark of $1 billion in assets. We have faced many challenges over these 25 years and we have surmounted them all mainly for one reason; when all the noise settles, assessments completed, the inevitable conclusion is that we are a sound and viable financial institution with a team of exceptional people. We are proud of that fact. We are also very proud of the fact that we have created, and continue to create, a national asset of which all Bahamians can be proud.”

With more than 4,000 shareholders, BOB is a full-service financial institution with 13 branches on seven islands of The Bahamas and more than 350 full-time members of staff.

The government will create a National Economic Council to help guide its economic policy, Prime Minister Perry Christie announced today speaking at the Bahamas Business Outlook conference in Nassau.

The government has commissioned a final study of its tax reform proposals, as it gears up to introduce VAT by July 2014, and has reassured the business community that it will continue to consider alternative proposals.

The Bahamas Investor
Administrative Links