NASSAU, BAHAMAS — Commonwealth Bank believes that based on its “strong capital and liquidity positions” it has the ability to meet current and foreseeable obligations.
The bank noted that based on preliminary assessments it is likely to experience higher than budgeted impairment losses on its loans and investments due to the COVID-19 fall-out.
The BISX-listed bank pointed to the pandemic in its 2019 annual financial statements, noting the virus has had adverse impacts on economic and market conditions, both globally and locally.
“The Government of The Bahamas has closed the borders, implemented a nationwide lockdown, and restricted the provision of non-essential services,” the bank stated.
“Moreover, major hotel chains announced mass temporary layoffs during March, 2020. Consequently, management performed a COVID-19 impact assessment to determine the potential financial consequences to the group. This preliminary assessment indicates that the group is likely to experience higher than budgeted impairment losses on its loans and investments, and decreases in its original net income projections for the year ending December 31, 2020.”
It added: “Further, in response to the economic impacts of COVID-19 on the Bank’s customers, a six-month forbearance was granted to customers who maintained their accounts in good standing. This will result in decreased cash flows from the Bank’s loan portfolio.
“Management continues to monitor developments relating to the pandemic, and is directing its operational responses based on existing business continuity plans, guidance from the Government of The Bahamas, and general pandemic response best practices. Management is of the view that the group has the ability to meet current and foreseeable obligations, based on strong capital and liquidity positions.”