NASSAU, The Bahamas, Thursday August 17, 2017 – The Bank of the Bahamas (BOB) is facing an uphill battle to get out of the red as it continues to rack up millions of dollars in losses due to bad loans.
According to a report on the bank’s financial performance for the fourth quarter ended June 30, 2017, the bank recorded net loan loss provisions of about $35.4 million during the final quarter of the fiscal year 2016 and $49.2 million since the start of 2017
“This was up by $20.1 million from the same quarter last year and up by $24.7 million year to date compared to the prior year. As a result of the increased credit loss expenses, the bank recognized a net loss of $32.8 million for the quarter and $43.8 million year to date,” the report stated.
BOB acknowledged that the situation was worrying, stressing that its ultimate return to profitability is largely dependent on the performance of its loan portfolio.
It was at pains to point out that it would have earned $2.5 million in net income for the reporting quarters and $5.4 million to date barring the losses from bad loans.
“As such, a great part of the bank’s profitability will be contingent on resolving its non-performing loans.”
The Bahamas Government has expressed concern about the bank’s continuing troubles.
It recently announced that it would allow BOB to release itself of $166 million of non-performing loans to a special purpose vehicle – Bahamas Resolve Limited.
The bank said this transaction would “provide substantial relief” for its credit portfolio and overall financial position.
Meanwhile, BOB said it would continue to focus on transforming its business by focusing on initiatives around corporate governance, collections, cost optimization and customer care.