Prime Minister Perry Christie has announced that the government, given its 65 percent ownership stake in the Bank of The Bahamas (BOB), intends to steer more public sector business and public employees credit demand toward the bank.
"In so doing, the government will, of course, be mindful of its obligation to maintain a fair and competitive commercial environment for all banks in The Bahamas," Christie said. "I have, therefore, instructed the Ministry of Finance to determine the best course of action to achieve this objective on a correctly-balanced basis."
The prime minister was speaking at a press conference announcing the launch of Bahamas Resolve Ltd., a new government entity formed to take $100 million in bad commercial debt off Bank of The Bahamas' books, and to try to collect the debt with a broader palette of tools than the bank has available.
Christie said the government will not compromise on its commitment to the Bank of The Bahamas.

New directions
Bank Managing Director Paul McWeeney said depositors and shareholders ought to feel "bullish" about the bank's future, based partially on the government's intention to steer business BOB's way.
"Consistent with this effort, the bank is piloting a payment card system for social services as well as a payment card system for the general civil service for travel purposes," McWeeney said.
He said the bank had revamped its sales and services apparatus, separated certain front and back office functions and defined its organizational structure more clearly.
"With a renewed commitment from the government and the rationalization of BOB's balance sheet, I have every confidence that the shareholders in BOB will see stronger share value and renewed profitability and enhanced growth," McWeeney said.

Resolve timelines
Minister of State for Finance Michael Halkitis was reluctant to tie the company to a timeline.
"In maximizing the return on these loans, different tools might have to be used," Halkitis said. "It might very well be that some of the troubled assets might have to be treated as going concerns in order that they can eventually work their way out of troubled status."
Christie said the process would be transparent.
"What we do, who we do it with [will be transparent]," he said. "This is now the commencement of a new paradigm with respect to freeing up the bank, ensuring that the bank and its directors take advantage of the opportunity that the government has given it, that by the end of December a report is given the minister of finance as to the reforms that the board has now implemented."

About BOB
Sixty-five percent of the bank is owned by the government, with the remaining 35 percent split among 3,500 shareholders, who are all Bahamian. The bank has total assets of $771 million, according to Christie, compared to the $93 million in assets on the books when the government acquired ownership of the bank from the Bank of Montreal in 1988.
He said there are 40,000 depositors, with total deposits of $679 million. The bank's loan assets total $650 million.
"With all that successive governments have done over the years as majority shareholders of the bank, the guiding resolution has remained the same - to maintain the safety and security of customer deposits at all times," Christie said, "[and] to ensure that the bank is operated in accordance with regulatory norms imposed by The Central Bank of The Bahamas and industry best practices."
In addition to world-class customer service, the bank's goal has been to keep relevant and to serve its customers in a way that is responsive to their needs and the needs of the economy, "And to ensure that at all times the bank is backed by the full faith and credit of the government as majority shareholder, while at the same time preserving the integrity of the bank through a policy of non-interference by the government in day-to-day management and credit decisions," the prime minister said.

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