BOB reports overall net income of $6.4 mil. despite pandemic

Bank of The Bahamas (BOB) ended its financial year with a five percent decrease in operating income, due primarily to a loss in net interest income resulting from deferred loan fees associated with COVID-related consumer loan campaigns.

Kenrick Brathwaite, the bank’s managing director, said despite the pandemic, BOB registered overall net income of $6.4 million for the year ended June 30, 2021.

“Comparing the current year ended June 30, 2021 to the prior year ended June 30, 2020, the bank’s total operating income decreased by $2.1 million (14.93 percent) for the quarter and $2.4 million (5.12 percent) for the year, due to lower net interest income and net non-interest income,” he said in the bank’s financial performance report for the quarter.

“Despite higher interest income owing to the bank’s efforts in consumer loan campaigns and a decrease in interest expense due to a decline in certain deposit balances and interest rates, the overall decrease in net interest income of $2 million and $1.3 million for the quarter and year, respectively, were attributable to the deferred loan fees of $3.3 million recognized in the prior year. The decline in non-interest income of $1.1 million year to date was largely due to the adverse impact of the pandemic on the bank’s auxiliary revenue streams, which was immediate, substantial and continues, to date.”

Brathwaite said a Central Bank-imposed levy resulted in a higher bank license fee of $800,000, pushing operating expenses up by $2.9 million for the year.

“Increases were also noted in staff costs, depreciation and information technology-related expenses, as the bank invested in the 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 $15.3 million during the same period of the prior fiscal year, a 51.4 percent positive variance,” he said.

“Reversals of provisions for impairment of $5.3 million were also recorded during the current year, compared to impairment losses of $6.3 million in the prior year, as the ECL (expected credit loss) estimates and assumptions used on its sovereign and corporate exposures in the prior year did not materialize. Management continues to use its judgement in the assessment of any significant changes in the underlying assumptions on its financial assets due to the pandemic.”

BOB’s total assets amounted to $902.8 million and loans and advances were net of $391.3 million as at June 30.

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source https://thenassauguardian.com/bob-reports-overall-net-income-of-6-4-mil-despite-pandemic/