Bank of The Bahamas recorded a $1.92 million total comprehensive loss in the first quarter of its 2014 fiscal year, as its managing director said he sees "positive signs that things are about to turn" for the bank.
Paul McWeeney told Guardian Business that had the bank not set aside additional loan loss provisions in light of the "general economic outlook" as indicated in November when the bank released its annual report, it would have instead "almost broken even" in the most recent quarter, with a $300,000 loss.
He told shareholders in a letter issued alongside the results that the bank remains optimistic that improvements in the economy in the medium term will allow it to "claw back such provisions into income".
Speaking with Guardian Business about the results, McWeeney said: "This is not any surprise. We saw this coming and the important thing is that we once again went and put aside a general provision based on documented empirical data and that came in at about $1.6 million. We did that as a precautionary measure."
In his letter to shareholders, the managing director pointed to the overall weakness of the economy, "coupled with an anemic outlook", as a negative influence on the bank's financial results given the need for "specific and general loan loss provisions aimed at insulating the balance sheet against the realization of risks".
In its notice to shareholders issued yesterday, BISX-listed bank reported total assets of $906,178,894, total liabilities of $767,330,280, and total equity of $138,848,614. The company achieved net interest income of $10,500,726.
Despite the loss, McWeeney said the bank is "cautiously optimistic" that things "are about to turn in the third quarter".
The managing director explained that much of the bank's optimism is based on efforts to work with customers to improve their capacity to meet loan obligations.
Asked about the composition of the bank's loan portfolio in terms of the level and extent of arrears, McWeeney said that "at that point in time" - by the end of September 30 - the bank's loan portfolio remained "basically in line with the industry" standards on loans in arrears.
"The fortunate part I'd like people to focus on is that you can see that over the years the bank's profitability allowed it to adequately plan for days of this nature," he said.
"Our capital ratio remains very robust.
"We also continue on our course of doing other things. By now we would've completed retiring all of our debt; that was a significant initiative that we were able to fulfil and we continue to expand our private banking and trust areas and our ABM network."
In a recent statement the Bank of The Bahamas assured its customers that it adheres to "sound banking principles that are consistently tested and validated by internal and external authorities to ensure the highest standards of prudence".
McWeeney noted that the bank creates a "careful segregation between the executive and the administrative arms of the bank, on the one hand, and credit risk management and loan approvals, on the other hand".

Click here to read more at The Nassau Guardian