BOB records $7.4 million net loss

BOB records $7.4 million net loss
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NASSAU, BAHAMAS — Bank of the Bahamas has recorded a net loss of $7.4 million for the twelve months ending June 30, 2020, with its operating expenses increasing by nearly 26 percent in its fourth quarter.

BOB’s Managing Director Kenrick Brathwaite said the bank had recorded a net operating income of $14.3 million for the twelve months ended June 30, 2020, compared to $4.6 million on June 30, 2019.

In a statement, Brathwaite detailed the financial performance of the BISX-listed lender for the fourth quarter ending June 30.

He said the net income was offset by the provision for impairment losses of $6.3 million and credit loss expense of $15.3 million.

This resulted in an overall net loss of $7.4 million for the year ended June 30, 2020, compared to $2.9 million of net income in the prior year ended June 30, 2019.

Brathwaite said: “Net credit loss expense for the quarter ended June 30, 2020, increased by $6.7 million compared to the quarter ended June 30, 2019; and $13.6 million increase for the year ended June 30, 2020, versus June 30, 2019, due to the pandemic. The bank also recorded $6.3 million provision for impairment losses on sovereign and corporate financial asset exposures due to the pandemic.” 

He also noted that BOB’s total operating income increased by $2.0 million or 18.25 percent for the current quarter and $6.0 million or 14.64 percent for the current fiscal year.

Brathwaite said this was explained largely by the $2.8 million and $6.5 million increases in net interest income, for the current quarter and for the year, respectively.

“The positive variance in net interest income for the year was due to the increase in interest revenue by $5.3 million primarily from interest on consumer loans and deferred loan fee change in accounting estimate, and lower interest expense by $1.3 million due to a decline in certain interest rates and deposit products,” he said.

“However, the impact of the pandemic was immediately felt by the Bank on its non-interest income resulting in an overall decline of $0.8 million and $0.5 million recorded for the current quarter and year to date, respectively.”

He said: “The bank’s operating expenses increased by $1.9 million or 25.99 percent for the quarter due to increased bank license fees imposed by the Central Bank, higher cleaning and sanitation expenses per the existing pandemic protocol, additional insurance and IT related costs, while there was a $3.7 million or 10.20 percent decrease for the year largely owing to the provision on a legal claim recorded during previous fiscal year partially offset by the noted increases during the last quarter of the year.

“The bank continues to maintain a strong financial position with total assets of $822.0 million, and the composite of loans and advances, net $370.5 million as at June 30, 2020, which showed $3.8 million or 0.47 percent and $26.3 million or 7.63 percent increase, respectively, since June 30, 2019.”

Brathwaite said the bank’s liquidity position remained strong, as its cash and cash equivalents stood at $180.7 million, a $23.3 million, or 14.77 percent increase since the prior year. He also noted that the bank’s key capital ratio is in compliance with regulatory requirements.