News

Growth Plan for Bank of The Bahamas

Published

10 years ago

November 4, 2014

Deandrea S Hamilton

NASSAU, 31 Oct 2014 –

Statement by
The Right Honourable Perry G. Christie MP
Prime Minister and Minister of Finance

For 25 years, successive governments have worked hard to transform Bank of The Bahamas from a foreign owned entity into a fully Bahamian owned clearing bank with a unique mix of public and private sector ownership, offering to the public a wide range of banking services in New Providence, Grand Bahama and various Family Islands where other clearing banks have historically shown little interest in going.

Today:

• BOB is 100% Bahamian-owned : 65% by the Government of The Bahamas, with the remaining 35% being widely held by some 3,500 Bahamian shareholders.

• BOB now has total assets of $771 million dollars, compared with only $93 million when the Government acquired ownership of the bank from the Bank of Montreal 25 years ago in 1988.

• BOB has approximately 40,000 depositors today with deposits totalling $679 million dollars.

• BOB has total loan assets of approximately $650 million dollars

• BOB operates through 14 branches in The Bahamas

• BOB employs more than 350 Bahamians.

With all that successive governments have done over the years as majority shareholders of the bank, the guiding resolve has remained the same:

• to maintain the safety and security of customer deposits at all times;

• to ensure that the bank is operated in accordance with regulatory norms imposed by the Central Bank of The Bahamas and industry “best practices” ;

• to ensure that the bank delivers its services to its customers at a world-class standard and in a way that is relevant and responsive to the needs of Bahamians and their national economy ;and

• to ensure that at all times the bank is backed by what is colloquially referred to as the “full, faith and credit” of the government as the majority shareholder, while at the same time preserving the integrity of the bank through a policy on non-interference by the government in day-to-day management and credit decision-making.

Although between 1993 and 2012, BOB enjoyed an unbroken record of profitability, it has, in common with nearly all other clearing banks in The Bahamas, experienced reversals either resulting from or exacerbated by the recent global recession and, in particular, the last U.S. recession.

In the case of the Bank of The Bahamas, the Central Bank, under the leadership of Governor Wendy Craigg, has carefully monitored BOB with particular reference to the risks posed by BOB’s portfolio of non-performing commercial loans. As part of this regulatory oversight, the Central Bank has engaged the Ministry of Finance in constructive dialogue on remediation strategies. Out of this has developed a specific plan of action.

I am therefore pleased to announce this plan today. Here is how it will work:

The Ministry of Finance has established a new Bahamian company, Bahamas Resolve Ltd (“Resolve”) which is wholly-owned and wholly controlled by the Government of The Bahamas. Resolve has taken over B$100M in troubled commercial loans from Bank of The Bahamas, thereby removing this risk from BOB’s books. In so doing, the Bank’s revenue prospects will be immediately and significantly improved. At the same time, shareholder value and the Bank’s overall financial condition will be enhanced as well. It will also allow Bank of The Bahamas to return to profitability in the near future and will restore full compliance with Central Bank and international regulatory standards for capital adequacy.

I should like to emphasize, firstly, that no public treasury or National Insurance funds have been disbursed in connection with the assignment of these loans from BOB to Resolve. However, liability for these debts has been transferred to Resolve along with the benefit of the loans and the underlying security. And as the new owner of the transferred loans, Resolve will be putting special mechanisms in place to assist in the collection of the overdue loans.

Secondly, I should also like to emphasize that this transaction, under which $100 million in commercial loan debt has been transferred from BOB to Resolve, was developed in close consultation with BOB’s legal advisors in this matter, Higgs & Johnson, and BOB’s external auditors, Ernst & Young, both of whom have provided affirmative opinions on the transaction.

And thirdly, I should also like to emphasize that this kind of transaction is not fundamentally dissimilar to state-led re-structurings that were done or accommodated for a number of banks in the more developed economies of the world, including the U.S., in the wake of the 2008 recession.

In addition to what I have just outlined, I wish to make it known that the Bahamas Government, consistently with its 65% stake in BOB, will be pursuing new initiatives designed to steer more public sector business and public employee credit demand towards the Bank of The Bahamas. In doing so, however, the Government will, of course, be mindful of its obligation to maintain a fair and competitive commercial environment for all banks in The Bahamas. I have therefore instructed the Ministry of Finance to determine the best course of action for achieving these objectives on a correctly balanced basis.

In conjunction with the elements of the plan that I have just outlined, the Bank of The Bahamas will also undertake re-structuring action of its own to re-align and re-balance the bank’s business model towards more retail banking, consumer lending and e-banking products.

BOB’s Board of Directors has also been directed to assess its management and cost structure, and to submit recommendations to the Government, as the majority shareholder, for management and administrative re-organization, before the end of 2014.

Together, the plan and measures that I have outlined will help ensure the sustained stability and future growth and profitability of BOB. The Bank of The Bahamas bank has a great and prosperous future ahead of it.

Related Topics:bahamas bank of bahamas Perry G. Christie

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Caribbean News

PM INVITES INDIAN INVESTORS TO EXPLORE OPPORTUNITIES IN JAMAICA

Published

1 day ago

October 8, 2024

Deandrea Hamilton

KINGSTON, October 8 (JIS): Prime Minister, Dr. the Most Hon. Andrew Holness, has invited Indian investors to explore business opportunities in Jamaica.

He cited prospects for innovative business investment in tourism, infrastructure development, renewable energy, animation, medical tourism and health.

He noted that, with the island’s extensive harbour and port systems, “We are the gateway for Indian innovation in the Americas. I think the time is right for a trade and business delegation from India to visit Jamaica. I mentioned this to Prime Minister [Shri Narendra] Modi and he welcomed the possibilities of such a trade delegation.”

The Prime Minister was addressing a dinner reception on Tuesday (October 1), during his working visit to India.

He said that his trip is intended to herald a new era of Jamaica-India friendship and partnership.

Dr. Holness said that Jamaica is looking forward to working with the Confederation of India Industry (CII) to explore areas of cooperation.

Of special interest, he noted, is working with Indian companies on joint research projects and technology transfer “to enhance Jamaica’s research and development landscape, particularly in the areas of biotechnology, as well as products and drug development, using Jamaica’s natural resources”.

“We also want to welcome Indian companies providing software development and maintenance, cybersecurity, back-office, finance and accounting services,” he added.

Based in New Delhi, CII is a non-governmental trade association and advocacy group that represents the interests of Indian businesses in various sectors, chiefly engineering, manufacturing, consulting, and services.

The organisation works to create and sustain an environment conducive to the development of India.

CONTACT: SIMONE HYLTON

Caribbean News

OLD HARBOUR HIGH SCHOOL RECEIVES BUS FROM JAPAN

Published

1 day ago

October 8, 2024

Deandrea Hamilton

KINGSTON, October 8 (JIS): Some students at Old Harbour High School in St. Catherine, now have reliable transport after the institution received a 29-seater bus, donated by the Japanese Government.

The vehicle, valued at more than $11 million, will cater mostly to students who travel long distances, filling a gap for safe, reliable, and efficient transportation.

It will also be used to transport students on field trips, sporting events and other activities.

Speaking at the handover of the bus at the school on October 4, Minister of Education and Youth, Hon. Fayval Williams, lauded the Government of Japan for providing the funds through the Grant Assistance for Grassroots Human Security project (GGP), to purchase the bus.

Mrs. Williams said that special thanks must be given to the people of the donor country as “we continue to deepen the partnership with Japan”, adding that the GGP project “has played a vital role in the development of our schools”.

Meanwhile, Ambassador of Japan to Jamaica, His Excellency Yasuhiro Atsumi said his country “stands together with Jamaica to strengthen the education system, so that all students can pursue their education and lifelong skills training opportunities”.

For her part, Custos of St. Catherine, Hon. Icylin M. Golding, who is also Chairman of the school, told her audience that the bus will enable the students to reach school much easier, and to “participate in more sporting events”.

Principal of the institution, Lynton Weir, said the students will reach school and return to their homes on time, with the acquisition of the bus.

He added that this will also result in reduced cost for parents who used to pay the public transport operators.

For Executive Director of the National Education Trust (NET), Latoya Harris Ghartey, getting the Japanese to fund the acquisition of the vehicle shows the strength of partnerships.

“It also stands as a testament to the deep-rooted commitment we have in providing our children with the tools they need to excel,” she said.

Student at the school, Ashanti Jones, said the “life-changing donation and invaluable gift will aid in students not missing classes due to unreliable transportation”.

Another student, Dormel Hamilton, said the students will have a safe and reliable vehicle in which to travel to school, and appealed to motorists to take care on the roads.

CONTACT: GARFIELD L. ANGUS

RELEASE: JIS

Caribbean News

Sanovnik Destang Elected New President of the Caribbean Hotel and Tourism Association (CHTA)

Published

1 day ago

October 8, 2024

Deandrea Hamilton

Bay Gardens Resorts Executive Director to Lead Organization for Next Two Years

Sanovnik Destang, a respected hotelier from St. Lucia and Executive Director of Bay Gardens Resorts, has been elected as the new President of the Caribbean Hotel and Tourism Association (CHTA). His appointment was confirmed at CHTA’s Annual General Meeting (AGM) last week, succeeding outgoing President Nicola Madden-Greig. Destang will serve a two-year term, leading alongside a newly elected slate of executive officers.

Destang brings extensive leadership and hospitality experience to his new role, having served as a key figure in the growth of Bay Gardens Resorts in St. Lucia. His commitment to CHTA began in 2012, and he is ready to lead the organization into a new chapter, focusing on people and technology as well as creating stronger linkages with other sectors of the Caribbean economy.

Destang expressed gratitude to his predecessors and emphasized the importance of collaborative leadership: “Thank you all once again for putting your faith in me and my generation. Being CHTA’s first president born in the 1980s, I fully understand the responsibility ahead of me. I’m ready to lead, but, more importantly, I’m ready to serve. My focus areas will be people, technology and linkages to other sectors of our economies and communities. This strengthened advocacy is aimed at attracting more members to our association, bolstering ourcollective voice and impact.”

Reflecting on her tenure, Madden-Greig highlighted CHTA’s achievements during a challenging period. She praised the resilience of the Caribbean region as it emerged as the fastest-recovering tourism market in the world post-COVID-19. Under her leadership, CHTA along with regional and international stakeholders helped implement and promote recovery measures and initiatives, including Caribbean entry portals and the Caribbean Public Health Agency’s (CARPHA) Healthier Safer Tourism program.

“The past three years, taking over at the height of the COVID-19 pandemic, were both challenging and very rewarding,” said Madden-Greig. “Nothing has given me more joy than having headed the hard-working team that led the Caribbean to be the fastest recovering region in the world, coming out of a once-in-a-century pandemic,” she added.

The newly elected CHTA Officers will work closely with Destang over the next two years, along with CHTA Regional VPs, Committee Chairs, and other Executive Committee Members, who will be announced shortly.

The officers include:

1st Vice President: Karen Whitt, The Hartling Group, Turks & Caicos
2nd Vice President: Craig Marshall, Blue Diamond Resorts, Antigua & Barbuda
3rd Vice President: Clifton Reader, Palace Resorts, Jamaica
4th Vice President: Kendra Hopkin Stewart, Blue Horizons Garden Resort, Grenada
5th Vice President: Bill Clegg, BW Hotels, At-Large
Treasurer: Jim Hepple, Tourism Analytics, Aruba

CHTA, as the voice of Caribbean hospitality and tourism, will build on the strong foundation laid by Madden-Greig. Destang’s leadership will advance growth through innovation, people-centered initiatives, and stronger linkages with key sectors, keeping the Caribbean at the forefront of global tourism.

Supported by a team of regional leaders, Destang will drive new initiatives that propel the industry and CHTA members to greater heights.