$2 billion asset base decline over five years for public banks, trust companies

The Central Bank of the Bahamas.

NASSAU, BAHAMAS – Public Banks and Trust Companies in The Bahamas have seen a more than $2 billion decline in their combined asset base in just five years, the Central Bank of The Bahamas revealed.

In a new move to include more than just domestic banking data in its quarterly statistical digest, the Bank recently released the February report with the balance sheet information for public banks and trust companies.

“An analysis of the data revealed that the asset base of the Public Banks &/or Trust Companies, has contracted over the last five years, from close to $400 billion to approximately $184 billion,” said the Bank.

“[That is] a decline of 53.7 per cent, due mainly to a change in firms’ business models (treasury operations), which resulted in a shift in their asset base to other jurisdictions. The non-resident entities’ asset base accounts for 90.3 per cent of the total, while domestic banks represent a mere 9.7 per cent.

“However, the bulk of the latter relates to assets domiciled in The Bahamas.”

The additional data is expected to offer a benchmark as to market share of supervised financial institutions and provide a better understanding of the size and complexity of the industry.

The move comes as the government tabled a new Investment Funds Bill in the House of Assembly last week that is set to bring a new era to Financial Services in The Bahamas and stem any declines in business from listings by the European Union or the Organisation for Economic Co-operation and Development.

Deputy Prime Minister and Minister for Finance Peter Turnquest said the Bill proposes to open the industry in key ways that will allow Bahamians greater access to international service providers as a way to enhance their operations and client offerings.

“It announces that Bahamian investment fund professionals and the industry are ready to compete internationally,” he said. “It aims to ensure market access, both to the investment products of other jurisdictions, such as the European Union, but also of those jurisdictions to Bahamian markets.

The 2019 Bill is expected to fill the “gaps” that left this jurisdiction non-compliant with four out of five principles of securities regulations with international standards. Turnquest argued that it had strong compliance with best practices and international standards, comprehensive and inclusive development process, and forward-looking approach to market growth and development, promises that it is the right legislation to ensure this chapter is one in which the investment funds industry continues to flourish in The Bahamas.