Banks bracing for rise in loan delinquencies and loss of clients

Banks bracing for rise in loan delinquencies and loss of clients
The Bahamas Institute of Chartered Accountants (BICA) Accountants Month conference 2019
NASSAU, BAHAMAS – The commercial banking sector is bracing for a rise in loan delinquencies as well as loss of clients due to Hurricane Dorian, the head of the Clearing Banks Association (CBA) said yesterday.
LaSonya Missick, chair of the Clearing Banks Association, underscored the business disruoption on hurricane-ravaged islands while addressing the Bahamas Institute of Chartered Accountants (BICA) Accountants Month conference.
“We were able to get Freeport back up and running relatively quickly but on Abaco business has been significantly disrupted,” Missick said.
“We have to think about the losses to our loan books and the level of provisioning that will have to happen at the end of the day. We anticipate that there will be a rise in delinquencies.
She continued: “We are not able to estimate that yet due to the deferral program that we put in place. We are only about two months in post Dorian. Many of our clients are on deferred payment plans.
“It is when those plans end after the five or six months period that we will really be able to determine the amount of delinquency and the impact on our books at the end of the day. We will continue to work with each client and support them based on their needs and circumstances as those deferral periods end.”
Missick also told attendees the commercial banking sector also anticipates it will lose some of its clients as well.
“We anticipate losing clients,” she said.
“Some people have said they are just leaving The Bahamas and aren’t coming back. When we think about both our resident and non-resident book we do have to anticipate that our client portfolio will be reduced to some degree.”
She added: “What we do not know at this time is how much of that is just based on emotion and some of the post traumatic stress coming from the storm and how much would be real losses after persons have had time to think about whether they will return to Abaco and Freeport.
Clearing Banks Association chair LaSonya Missick’s bio in the BICA 2019 conference booklet.
Missick admitted banks are facing a challenge to determine the type of services they can offer on Abaco.
“We are still waiting to see how the restoration activities move forward. We do know that banking services are essential,” she said.
“One of the things we have done is reached out to our clients and let them know the options  they have across electronic and digital platforms.
“We are looking to get more ATMs in Abaco at key locations in two to three weeks.”
Missick said: “Our initial thoughts are around putting in services that the island needs right now and not necessarily what it would need in two to three years when the entire  community is hopefully restored and commerce is active again.”
She said banks are considering shared locations like mobile trailers in the short-term, adding banks are committed to long term rebuild efforts.