Recent media reports suggesting political favoritism or political involvement in the granting of loans by Bank of The Bahamas are "simply untrue", the bank said in a statement on Friday.
"Successive governments, to their credit, have systematically avoided any involvement in credit policies or the granting of credit," the statement said.
"Further, virtually all of the loans involving so-called political persons that have been the subject of recent stories in the media were made in the period 2008-2010 when these persons were not even in government.
"Indeed since 2011 there have been very few new commercial relationships established at all, the bank having decided instead to concentrate on potentially more profitable areas of the retail banking market. The time periods just mentioned are significant therefore in dispelling the idea that politics played a role in the granting of loans."
BOB was responding to The Punch, which claimed to list several political figures' loan information at the bank.
The bank said the loans made were not personal but commercial loans "in which certain political figures may have been interested as investors or shareholders".
BOB added that the bank operates on principles and standards and after remaining silent on the issue, felt it needed to set the record straight.
"Recent media reports suggesting excessive unsecured lending practices are simply untrue. In virtually all cases, our loans are more than adequately secured," the statement said.
"In any event, the loans in question, although not accurately reported, represent a very small fraction of the bank's overall loan portfolio and do not in any way constitute a material risk to the overall health and soundness of The Bank of The Bahamas."
BOB said it registered its first loss last year, a loss of $3.5 million, after 20 consecutive years of profitability.
"In this regard, however, the bank's experience was hardly unique," the statement said.
"Indeed another clearing bank just recently posted a sizeable loss for the same period -- again the first loss of its kind. Others, it should be remembered, recorded losses in recent years.
"The point is that these are challenging times for banks in The Bahamas. However, The Bank of The Bahamas, in common with all the other clearing banks, has proactively taken the necessary steps to ensure that it is robustly positioned to deal with the challenges that we all currently face."
The bank said it has achieved tremendous success over the years and is well poised for a return to profitability
The statement said, "The bank is robustly capitalized exceeding Central Bank requirements and international banking norms. Through a combination of profit retention and preference share issuances, the bank grew its total equity from $17 million to its present level of $140 million.
"With this level of capital, the bank has a risk weighted capital ratio of almost 22 percent which is consistent with the averages of other clearing banks and well above the range of 14 percent to 17 percent required by The Central Bank of The Bahamas."
BOB said an investigation is ongoing into the source of the leaked confidential information. It said that internal steps have been taken to prevent future breaches.

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