Commonwealth Bank: $40 mil. restructured accounts linked to Dorian

Commonwealth Bank: $40 mil. restructured accounts linked to Dorian
Commonwealth Bank

NASSAU, BAHAMAS — Commonwealth Bank saw just over 27 percent or $40.6 million of its 2019 restructured accounts total related to customers who received assistance after Hurricane Dorian.

The BISX-listed lender in its 2019 annual report noted that total restructured accounts at December 2019 amounted to $148 million or 14.6 percent of the portfolio, an increase of $13 million.

While this total reflected an increase over 2018, the bank noted $40.6 million of the total were related to customers who received assistance after Hurricane Dorian.

The total restructured loans would have been otherwise $107.4 million, a reduction of 20.4 percent.

“Personal loans accounted for 72 percent of the Bank’s credit portfolio and totaled $735 million as at year-end,” the bank reported.

“This represents a decrease of $42.2 million (-5.5 percent) over the previous year. The Bank’s mortgage portfolio recorded a decline of $20 million (-10 percent). Mortgage balances at the end of the year were $180.5 million compared to $200.7 million at December 31, 2018.”

At December 31, 2019 the mortgage portfolio made up approximately 17.7 percent of the total loan portfolio; and 18.8 percent in 2018.

The report stated: “Although there was a decline in the Bank’s credit portfolio during the year, the Bank remains focused on ensuring that the growth in new credit comes as a result of good quality loans. This continues to be a challenge given the current economic environment and fierce market competition.

“To this end the Bank continues to review and strengthen its lending criteria and practices.The business loan portfolio was $25.7 million or 2.6 percent of the loan portfolio (2018: 2.8 percent), a decline of $3.9 million, (-13.3percent) from the $29.6 million in the previous year.

“Credit card loans were $41 million, an increase of $4.2 million or 11.4 per cent above 2018. Total deposits from customers closed at $1.4 billion an increase of 7.9 percent since December 31, 2018,” it read.

Commonwealth Bank president Raymond Winder noted that as a result of assessments of expected credit losses deriving from the Hurricane Dorian damage, loan loss impairment expense increased by $20.3 million for the year compared to 2018.

“This conservative position had to be taken with the hurricane occurring so close to year end and there being so much uncertainty as to when and if business will be able to re-establish themselves and re-employ their staff – our customers,” he said.

“After this assessment was done, Commonwealth Bank reported net income of $31.6 million, a decrease of $20 million from 2018. Impairment allowances increased $20.3 million of which $13.4 million was attributable to allowances arising from Dorian,” said Winder.