Impact of COVID-19 felt in Bank of The Bahamas’ third quarter

Bank of The Bahamas (BoB) has reported continued losses in its third quarter, as the COVID-19 pandemic continues to have an impact.

At the end of March, BoB recorded a $1.4 million net loss due to credit loan losses and impairment losses of $8.0 million.

Still, the bank registered net operating income of $6.6 million, according to BoB Managing Director Kenrick Brathwaite.

“Comparing the current period ended March 31, 2021 to the prior period ended March 31, 2020, the bank’s total operating income decreased by $0.1 million (1.25 percent) for the current quarter and $0.9 million (2.6 percent) for the current fiscal year to date due mainly to lower net non-interest income, partially offset by higher net interest income,” he said in the quarterly filings.

“The impact of the pandemic was immediately felt by the bank on its non-interest income, resulting in an overall decline of $0.4 million and $1.6 million for the current quarter and year to date, respectively. The positive variance in net interest income of $0.2 million and $0.7 million for the current quarter and year to date, respectively, were attributable to higher interest income owing to the bank’s efforts in consumer loan campaigns. This was combined with a decrease in interest expense due to a decline in certain deposit balances and interest rates.”

Higher bank license fees along with human resources and administrative costs resulted in a 5.7 percent increase in operating expenses.

“Increases were also noted in staff costs, depreciation and IT-related expenses as the bank invested in human resources, system innovation and upgrades to support its planned growth and strategic initiatives. Net credit loss expenses of $7.5 million were recorded year to date, compared to $7.7 million of net credit loss expenses during the same period of the prior fiscal year – a 3.37 percent positive variance,” the bank stated.

The pandemic has resulted in most commercial banks taking a conservative lending stance to maintain liquidity. This has paid off, according to Brathwaite, who said BoB continues to maintain a strong financial position, with total assets of $914.7 million and the composite of loans and advances net of $384.4 million at the end of the quarter.

“Total equity closed at $152.9 million and the bank’s liquidity position also remained strong as its cash and cash equivalents stood at $230.2 million. The bank’s key capital ratios continued to be in compliance with regulatory requirements, with a CET 1 (Common Equity Tier 1) ratio of 36.1 percent, well above the Central Bank’s requirement of 9.6 percent,” he said.

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