More than 400 people packed the SuperClubs Breezes ballroom on May 28 for the Commonwealth Bank annual general meeting, creating a record crowd for attendance.
"Our results this past year were very impressive when one considers the difficult economic environment and increased competition that we are exposed to," said William B. Sands, Jr., executive chairman. "Total profit in 2013 was $51 million, the third highest profit in the bank's history."
That result, said President Ian Jennings, placed Commonwealth Bank out in front of all the clearing banks in The Bahamas, including those with vast regional resources and assets; it also allowed the bank to pay out a total of $29.5 million in dividends to some 6,000 shareholders from every walk of life who earned quarterly and extraordinary dividends totaling 30 cents per share in fiscal 2013.
Questioned whether the bank would alter its business model of personal banking relationships with a focus on consumer lending to move toward e-banking and other global banking initiatives, Jennings said Commonwealth Bank understands its market and will continue to focus on personal banking, implying that a move outside its core business could easily have quick negative results.
"The challenge comes not from the growth period," he told the standing room-only crowd, "but from how you maintain your performance once growth slows down. The danger of growth or undertaking new business directions is that you outgrow your capacity to manage the business."
More important than changing direction, he said, is managing risk and maintaining strong personal relationships with customers. Risk management and consistency were themes carried throughout the meeting that several times erupted in applause as financial highlights were interspersed with appreciation to staff and shareholders.
"The foundation of Commonwealth Bank is ingrained in our business model, which focuses on personal banking," said Sands. "This model is captured in our vision - to be the first choice of Bahamians for all personal banking services. This model has served us well over the years as we have successfully used it to navigate through good and bad times, and in many instances outperforming our competitors. The current challenging economic environment has become our new normal since 2008 and is expected to persist in the short term. While the market environment in recent years has forced many of our competitors to change direction, our business model has and will continue to be consistent, reinforced and focused on being the first choice of Bahamians for all personal banking services."
As Jennings said, "there has never been an easy year", but the bank's challenges of impaired loans - a major concern for all banks throughout the retail domestic system - are being met through a multi-tiered approach that involves concentration on quality loans, active collection and writing off those loans that are realistically unable to be satisfied. The combination of tactics has produced a stronger loan portfolio, according to reports, with Commonwealth Bank's non-performing loan portfolio at less than a third of the percentage of the industry average that hovers about 15 percent.
In a snapshot of financials for the fiscal year that ended December 31, CFO Patrick McFall reported a 42 percent increase in profits from the previous year.
"Commonwealth Bank had total profit of $50.8 million dollars in 2013, compared to $35.7 million in 2012 - an improvement of 42.1 percent," he said. "Commonwealth Bank ended 2013 with total assets at $1.43 billion, basically unchanged from 2012. The combination of improvements in profits and no change in assets resulted in overall improvements in the bank's performance ratios.
"Earnings per share is up 50 percent. Return on shareholders' equity is up 42 percent. Profit available to common shareholders is up almost 50 percent. While total profit is up, the bank's efficiency ratio is also up."
In other business, shareholders approved the first increase in remuneration for directors in several years, approved the amendment of the rights of unissued preference shares to terms that comply with Basel III accords on Tier 1 capital and re-elected all directors, including William B. Sands, Rupert W. Roberts, Jr., Earla J. Bethel, Dr. Marcus R.C. Bethel, Larry R. Gibson, Robert D.L. Sands, R. Craig Symonette and Vaughn Higgs. Jennings continues to serve in his capacity as president.

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