Non-performing loans at Bank of The Bahamas (BOB) stand at 12 percent, according to its managing director, and this level will likely remain unchanged for the rest of 2012.
Paul McWeeney told Guardian Business that the bank has achieved a "stabilization", but the economy is not showing sufficient improvement to merit a positive trend.
Last week, Bahamas Mortgage Corporation (BMC) Chairman Duane Sands reported that arrears at the BMC have been reduced to just over 34 percent of its total portfolio. Arrears were reduced by 3 percent compared to last year, with bad debt mounting to more than $63 million.

The total portfolio of loans under repayment at BMC is $183 million, an improvement over $176.8 million at the end of last year.
As a different kind of institution, McWeeney felt that chipping away at its non-performing loans was not "realistic" this year.
"We would love to improve it, but we don't think it's realistic. The market is still tough, unemployment is still high and we expect it will continue to be tough," he explained. "It won't happen this year. The indicator that will determine it will be unemployment."
However, BOB's managing director noted that tourism numbers are improved in 2012 compared to last year. In fact, top hotels in New Providence recently reported an average occupancy in the mid-80s so far in 2012, while Atlantis has seen bookings in the mid-90s.
McWeeney felt encouraged by the numbers, but stopped short on any specific growth in employment levels in that sector.
"We don't see significant improvement barring some unforeseen event. We are optimistic though that it won't get any worse," he told Guardian Business.
Turning to the branch side of the business, McWeeney said BOB is on schedule to revamp its Grand Bahama branches in Freeport and Eight Mile Rock. He estimated work could begin in the next 60 says, as an architect has been brought on to decide what needs to be done.
He called the updates "an enhancement to what we have, to make it more applicable to the new banking environment".
These branches will be fashioned, he said, to reflect the design and standards of the recently opened Village Road branch. The budget for the revamp is in the $1 million range, not including equipment.
Meanwhile, work on the Carmichael Road location is ongoing and should be completed by the end of July.
The new layout at the BOB branches are intended to be more spacious and to allow for greater customer flow, according to the managing director. It also includes the introduction of new ABMs and customer service stations.
BOB is now in the midst of improvements to its services and technology offerings in an effort to boost non-interest revenue by 50 percent in five years.
By the end of next year, McWeeney estimated there will be 14 new ABMs installed at varying locations.

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