The man in charge of Bahamas Resolve Ltd. (Resolve), the company created to receive $100 million of Bank of The Bahamas' bad debt in October, said the bank must "re-instill confidence in itself" while Resolve forges its debt recovery policies for 2015.
Recently-appointed head of Resolve's board of directors James Smith told Guardian Business the sluggish economy will continue to create "issues". The stiff competition from other banks with a large amount of property already on the market will create a "tough environment" for 2015 and beyond, he said.
"The bank has to re-instill confidence in itself. It must always be improving the perception and reality by being more efficient and showing that it's capable of profitable growth in the future," he said.
When asked about instilling confidence in Resolve's ability to recoup some of BOB's losses given the government's troubled tax collection efforts, Smith stated, "It's really not a question of confidence at this stage. The loans have already gone bad, and the question is whether you just leave it or try to get something out of it."
Resolve acquired $100 million of BOB's bad debt on October 31. The government has since selected accounting firm Deloitte & Touche to handle the heavy lifting of debt collection, while Resolve and its board will be primarily responsible for collection policy.
BOB held its annual general meeting (AGM) last week, where both Managing Director Paul McWeeney and Chairman Richard Demeritte stated that the bank will focus much of its attention on leadership assessment and succession planning.
The bank announced that McWeeney will retain his post despite calls for greater disciplinary action, adding that BOB will submit management and business operations recommendations before the end of the calendar year.
Regarding the possibility of further disciplinary action for the bank's board, Smith said it wasn't his place to comment on the issue, noting that any decisions are ultimately up to BOB's shareholders.
However, Smith noted that BOB is a "strange creature" due to its 65 percent government ownership, which left the government's reputation on the line.
"The government has said quite clearly that it intends to keep [BOB] alive. Too much is at stake here in terms of the reputation of the government.
"It's not a bad debt if you have the government [promising] its resources to keep the bank going. The next move would be to ensure that resources are placed in the bank, managerial or otherwise, to make good on that promise," he said.

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