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Bank wipes out $30m loss in three months

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net A BISX-listed bank says its best first quarter for a decade has more than wiped out the near$30m full-year loss it suffered for 2021, which was sparked by a 41.4 percent jump in bad loan impairments driven by COVID-19 fall-out.

• Commonwealth enjoys best Q1 for decade • Driven by $17.4m COVID provision reversal • Commits to rolling-over $600m Gov’t debt

Tangela Albury, Commonwealth Bank’s vice-president and chief financial officer, in written replies to Tribune Business questions revealed that credit recoveries during 2022’s first three months were “more than double budgetary expectations” as borrowers’ ability to service their loans improved in line with a reflating Bahamian economy.

Driven by a $17.403m reversal of previously-taken loan

loss impairments, the lender’s $30.406m profit for the 2022 first quarter more than recovered in just three months the $29.998m full-year 2021 loss that was largely caused by a $27m-plus year-overyear rise in bad credit provisions.

“We have had a great start to the year, with a terrific first quarter total profit of $30m,” Ms Albury said. “This result has

Atlantis launches seaplane tie-up with Kamalame Cay

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net ATLANTIS has moved to better enable its guests to “experience the sheer beauty of the Family Islands” with this week’s launch of its partnership with Coco Bahama Seaplanes and Kamalame Cay. Audrey Oswell, the Paradise Island mega resort’s president and managing director, in written replies to Tribune Business questions said it was moving to “share all of The Bahamas with our visitors”

• Excursions to Harbour Island, Spanish Wells also planned by providing day excursions to the Andros resort via Coco’s seaplanes.

The three round-trip flights per week, capable of carrying eight Atlantis guests per trip, took off on Saturday from Odyssey Aviation at Lynden Pindling International Airport (LPIA) with the resort planning further excursion additions and expansions

‘Tremendous ignorance’ on VAT breadbasket row

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net THE Coalition for Responsible Taxation’s (CRT) head has slammed “the tremendous amount of ignorance” shown by Bahamian politicians from all sides in the continued debate about eliminating VAT on so-called ‘breadbasket’ items.

Gowon Bowe, who led the private sector group in the run-up to VAT’s

2015 implementation, told Tribune Business he has “extreme difficulty” with why some cannot see that zero rating/exempting these goods from the now-10 percent levy “is counterproductive to what the objective is”.

Removing VAT from goods such as flour, corn beef, grits and tomato paste merely gave a tax break to those who could afford to pay the tax, he reiterated,

SEE PAGE 9

‘No time to celebrate’ on better fiscal signs

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net WHILE the better-thanexpected fiscal performance gives the Davis administration “something to hang their hat on” heading into the upcoming 2022-2023 Budget, it was yesterday warned: “It’s not time to celebrate yet.”

Hubert Edwards, head of the Organisation for Responsible Governance’s (ORG) economic development committee, told Tribune Business that while the headline numbers unveiled on Friday were “positive” the entire

HUBERT EDWARDS report for the third quarter and first nine months of the Government’s 20212022 fiscal year needs to be

SEE PAGE 11

to give visitors “experiences like no other”.

“This service has been in the planning stages for quite some time. We wanted our guests to experience the sheer beauty of the Family Islands and love them as much as we do,” Ms Oswell said. “We are pleased to share this special experience with our guests,

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PAGE 2, Monday, May 2, 2022

THE TRIBUNE

CLOSING THE CIRCLE: GETTING TO THE ROOT CAUSES OF CRIME I n recent news headlines, we have seen more than 20 young men being murdered on New Providence in March.

This spree of what appears to be retaliation killings has caught the attention of the nation and, in response, Prime Minister Philip Davis held a conclave to address ways to combat these acts of violence. The Government’s response to the recent wave of crime comes as no surprise since it is hard to ignore the cry of citizens living in fear, and broken families that mourn loved ones. But the Government must do more than responding with knee-jerk decisions. Crime has always existed at alarming rates in The Bahamas. A 2016 study by the Inter-American Development Bank (IDB) on crime and violence in The Bahamas found one of the major murder motives in 2013 was retaliation (33 percent), a factor that has been consistently climbing since 2010.

Why does crime exist?

Crime is something that has always plagued us, yet we have done nothing to make a significant change. Crime and social policy must be looked at together. Several pieces of research have pointed out that societies that lack significant economic

development tend to have more violent crime, whereas in societies that modernise and become economically developed, violent acts become increasingly unacceptable and they also become increasingly rare. But crime is deeper than just economic hardship and survival needs. Crime stems from a myriad of factors outside of economic conditions, such as upbringing, beliefs, customs, family structure, education and other social factors. While we often neglect some of these causes, they are equally important in understanding how criminal behaviour starts. To understand this, let us examine the state of being poor, which is also known as poverty. One of the most frequently-studied correlations is between crime and poverty. The idea behind this is that persons who are poor are likely to be involved in more criminal activity, because being poor means having less access to a certain standard of living. To change someone’s life, they would need the means to do so, especially financial means.

Therefore, a life of crime may seem appealing to someone who is seeking to move away from poverty and improve their way of life. However, crime is not

SIMMS RODERICK A.

AN ADVOCATE FOR SUSTAINABLE FAMILY ISLANDS

always motivated by poverty or income inequality.

It is possible that crime is motivated by social inequalities, which result in trauma from childhood to adulthood. After all, we are a sub-total of our experiences.

In the face of poverty, we can become desperate and hopeless. Amid desperation, those faced with poverty-stricken conditions are watching family members suffer, sometimes going days without food or no access to basic utilities. Poverty can be ugly, and it can break us as human beings.

The psychological toll it takes is immense, especially when faced with the choice between doing right or

wrong. But do not believe that some criminals do not know right from wrong.

That is why poverty is a very difficult cycle to break, especially when someone becomes enamoured with a lifestyle of crime. The mindset of criminals can be passed on from generation to generation. We see it being glorified in subtle, or not so subtle, ways. We enjoy the ‘magic city’, we respect the street code and we somehow have created this unspoken notion that criminality is ‘cool’. Not everyone is afforded the same opportunity, but it does not mean that the only way out is a life of crime.

There are many individuals who grow up in impoverished neighbourhoods that used the resources around them to make a better way.

Therefore, improving the distribution of economic resources is something that we can do at the very least to give everyone a fair chance.

Crime is complex We agree that doing more for the poor can help reduce crime. But what does that really mean? If we took a criminal and gave him a house, a job and money to survive, would that necessarily change his outlook on life? We do not know.

According to an InterAmerican Development

Bank (IDB) study, Crime and Violence in The Bahamas: “When asked about the causes of crime and violence, many Bahamians will cite substance abuse, unemployment, poverty, poor parenting, teenage pregnancy, absentee fathers and the breakdown of social capital (defined as the capacity to transmit positive values to younger generations).”

These responses were taken from a focus group of Bahamians for research purposes. The responses also accurately point out that crime goes beyond just poor economic conditions.

For this reason, tackling crime requires a plan that is comprehensive enough to combat all root causes and offers preventative methods rather than suppressive ones. This thinking is also aligned with the findings from the IDB study, which said: “The presentation of programmes, projects and interventions in this report is meant to be a starting point for assessing and documenting promising crime prevention and control practices. It is worth noting that while government programmes targeting violence and crime still fall predominantly under the category of suppression, Urban Renewal Centres and some aspects

of Operation Ceasefire fall into the categories of situational and secondary prevention. This may signify a growing recognition of the importance of prevention.”

National Development Plan Since crime is a full circle phenomenon, then we need a solution that is also full circle. The National Development Plan (NDP) already addresses this by considering key challenges and how to address them such as: 1. Diminished compliance with the law 2. Culture of nonenforcement of the law 3. Unequal access to structured and effective education programmes 4. Community distrust or lack of social capital within communities 5. Increase in criminal behaviour By outlining steps to combat these challenges, we can tackle the deeper issues related to crime that lie outside the need for improved economic conditions. With these combined efforts, we can see a decline in the crime rate and criminals.

A full circle approach If we want to lower the crime rate, we need to go

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Cybercrime beats clients as greatest fraud threat CYBERCRIME now poses a greater threat to global businesses than customer fraud, a PricewaterhouseCoopers (PwC) survey has revealed, with hacking incidents rising in line with the digital economy’s accelerated growth due to COVID-19.

The accounting firm, unveiling its Global Economic Crime and Fraud Survey 2022, said 46 percent of global companies reported experiencing fraud or financial crime over the past 24 months. Some 70 percent of those that encountered these threats experienced new types of fraud as a result of COVID19 disruptions.

PwC added in a statement that environmental, social and governance (ESG) reporting fraud, and platform fraud, could impact businesses in the future. The technology, media and telecommunications sector experienced the highest incidence of fraud across all industries, exposing how vulnerable companies’ defences are, and that external fraudsters are becoming a greater threat as attacks increase and become more sophisticated.

The survey, based on responses from 1,296 business leaders across 53 countries, found that cybercrime, customer fraud and asset misappropriation were the most common crimes experienced by companies. PwC said cybercrime poses the biggest threat to small, medium-sized and large businesses after the impact of hackers rose substantially during the past two years.

The growth, and increasing use, of digital platforms opens the door to numerous financial crime risks.

PwC said 40 percent of those encountering fraud experienced some form of platform fraud. Cybercrime came in ahead of customer fraud, the most common crime in

2020, by a substantial margin with 42 percent of large businesses experiencing such attacks since the COVID pandemic began while only 34 percent experienced customer fraud.

Bruce Scott, cyber leader for PwC in the Caribbean, said: “Businesses are seeing an increase in threats from outside the organisation with perpetrators quickly growing in strength and effectiveness.

Defence against these external threats requires new thinking. Organisations need to be more agile than ever to respond to these converging threats, and adopt new approaches and technologies to predict and prevent fraud.”

Nestle Maullon, PwC Bahamas’ senior manager for cyber, said: “Entities having a basic understanding of what cybercrime is, and the reasonable controls they should implement, could safeguard from cyber threats. In our PwC in the Caribbean’s corporate governance survey, which was launched last month, 56 percent of Bahamian board members acknowledged that cyber/digital/technology needs more attention at the Board level.

“But the survey also revealed that 69 percent of them only somewhat understood the cybersecurity vulnerabilities their organisations were facing. Hence, organisations must invest in cybersecurity awareness training from top to bottom. This sets the tone that proper planning assessments are essential to identifying the gaps, implementing the necessary solutions to close the gaps, monitoring and assessing the effectiveness of the implemented controls, and addressing areas for improvements.

Management of cybersecurity is a process which never ends because cybercrime perpetrators are always motivated to find new victims.”

While just under half of PwC survey respondents (46 percent) reported experiencing fraud or economic crime within the last 24 months, the impact has been more substantial.

Among companies with global annual revenues over $10bn, 52 percent experienced fraud during the past 24 months.

Within that group, nearly one in five reported that their most disruptive incident had a financial impact of more than $50m. The share of smaller companies (those with less than $100m in revenues) affected was lower. Some 38 percent experienced fraud, of which one in four faced a total impact of more than $1m.

The growing maturity of the technology, media and telecommunications sector helped it identify a significant increase in fraud activity since 2020, with nearly two-thirds of companies experiencing some form of fraud - the highest rate of all industries.

Emerging risks, including ESG reporting fraud (the act of altering ESG disclosures so that they do not truly reflect the activities or progress of a company) and supply chain fraud have the potential to cause greater disruption in the next few years.

PwC said just 8 percent of organisations encountering fraud in the last 24 months experienced environmental, societal and governance (ESG) reporting fraud.

Yet, as ESG continues to increase in importance to stakeholders, the incentive to commit fraud in this area may grow.

Similarly, one in eight companies experienced new incidents of supply chain fraud as a result of the disruption caused by COVID-19, and one in five saw this as an area of increased risk as a result of the pandemic.

THE TRIBUNE

Monday, May 2, 2022, PAGE 3

DIGITAL ASSETS ‘SHOT IN THE ARM’ SPARKS ACCOUNTANTS TO REUNITE

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net THE Bahamas’ entry into the digital assets space sparked two well-known accountants to speed up their reunion after a decade apart by merging their two firms with effect from yesterday.

John Bain, the nowformer UHY Bain & Associates managing partner, told Tribune Business yesterday that the need to gain scale and increase competitiveness had prompted him to reunite with Philip Galanis under the HLB Galanis name some ten years after they went their separate ways in 2012.

Known then as HLB Galanis Bain, Mr Bain said

the decision to team-up once again was given extra impetus by the increasing inquiries he and Mr Galanis were fielding from investors in the digital assets space interested in establishing a Bahamas’ presence following this nation’s passage of the Digital Assets and Registered Exchanges (DARE) Act in 2020.

“I’m not big enough at UHY, Phil’s not big enough at HLB,” Mr Bain, who will become HLB Galanis’ advisory partner, explained of the rationale for their latest tie-up. “With the merger, we are able to take on bigger assignments. There’s a lot of things happening with the new digital asset and crypto laws.

“That was a shot in the arm. We were talking for the last year, but when the DARE Act came out we

got so many calls, so much was happening in The Bahamas. The contacts we have been getting about setting up in The Bahamas for crypto, and doing audits for crypto. We’ve been getting at least two calls a week about setting up in The Bahamas, doing crypto audits, verification of offshore digital assets.

“That’s been coming up a lot. A lot of current clients have assets in crypto. We’re expanding the practice in that area to be able to value the assets etc, and getting on with the blockchain digital ledger. Blockchain is a digital ledger, and we are learning about that technology and how to apply that to the accounting profession,” Mr Bain continued.

“Blockchain is going to have an effect on the whole accounting profession.”

The ability to create an electronic record trail that cannot be abused or misused could help The Bahamas address longstanding issues with land title and theft, he added, confirming that all respective staff at UHY Bain and HLB Galanis have been retained in the expanded firm that will be 25-strong with ambitions to expand it as business ramps up.

“HLB is going to be a significant player in the accounting profession in The Bahamas. Outside of the ‘Big 4’ we could be a significant player in the market,” Mr Bain said. Mr Galanis, who will assume the managing partner title at the merged firm, said their revived combination will create multiple “synergies” to make the new firm

greater than the sum of its parts.

The merged HLB Galanis, which will be based at Caves Village, aims to offer clients “a one-stop shop” for all auditing, accounting and advisory services. “When we bring the two together we really think we’re going to be a dynamic and perfect combo,” Mr Galanis said, adding that the merger will also help facilitate succession planning and the firm’s long-term sustainability.

In a joint statement, he and Mr Bain said: “We believe this merger will significantly expand the firms’ combined service offerings to our existing and future clients, and will greatly enhance our ability to create a one-stop shop for our clients’ financial needs.”

Among the services to be

REGULATORS TO DEMAND BPL FUEL HEDGE REPORT

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net Regulators will demand “a comprehensive report” from Bahamas Power & Light (BPL) on the effectiveness of a fuel hedging strategy that has been the subject of much recent controversy.

The Utilities Regulation and Competition Authority (URCA), unveiling its 2021 annual report and plan for this year, said that while on the surface it appeared the initiative introduced by the former Minnis administration had achieved its goals thus far there was a need “to ensure transparency and accountability” on the issue.

“In July 2020, BPL commenced its fuel hedging programme which has resulted in the application of a fuel charge of 10.5 cents per kilowatt hour (kWh) from commencement to date,” URCA said. The actual fuel charge

amendment was gazzetted on June 26, 2020.

“It is URCA’s understanding that the current hedged fuel price will remain in place until June 2022, when it is subject to adjustment in accordance with current fuel prices and an agreed adjustment mechanism. It is noted that the goals of the hedge were not solely financial, but also economic as it was viewed as a means of stabilising the fuel charge component of electricity bills during a period of economic uncertainty and heightened reliance on electricity supply services.”

The regulator continued: “While URCA has monitored the variance between hedged fuel price and an extrapolated fuel price utilising pre-hedge indicators, and prima facie it appears that the hedge has been beneficial thus far, URCA will request a comprehensive report from BPL in accordance with its licence obligation, Condition 24.

“It is within URCA’s remit to ensure transparency and accountability to the regulator, customers and stakeholders concerning the effectiveness of the hedge and the fuel consumption efficiencies of BPL’s operations.”

URCA’s report promise comes amid ongoing questions as to the status of BPL’s fuel hedging initiative, which was inherited by the Davis administration when it took office in September 2021.

No clear answers have been provided to questions over whether BPL executed the September and December 2021 option trades to keep the hedging structure in place, and what this might have cost the cash-strapped utility’s customers by forcing it to by fuel at higher ‘open market’ prices amid rising global oil costs. Alfred Sears, minister of works and utilities, has said the fuel hedging strategy remains in place but no details have been provided.

URCA’s report, meanwhile, indicates that businesses and households will likely see both the fuel cost component and overall electricity bills increase come July/August 2022, for this is when BPL must put in place a new fuel hedging strategy or decide to discontinue it. Even if it puts a new structure in place, BPL will almost certainly be paying a higher cost for its fuel due to the surge in global prices to around $100 per barrel.

Michael Pintard, the Opposition’s leader, who has raised multiple questions surrounding BPL’s fuel hedge, doubled down on several queries yesterday after URCA stated its position. Arguing that Mr Sears has been “both and forth, flip flopping” on the issue, he called on the minister and BPL Board to confirm whether the September and December trades were executed.

The FNM leader also asked Mr Sears to explain how he could say the fuel

GAS STATIONS HOPE FOR INDUSTRY ‘MODERNISING’

By YOURI KEMP Tribune Business Reporter ykemp@tribunemedia.net GAS station dealers are hoping the Government will either agree to a margin increase or “modernising” the industry’s structure, with a solution agreed before the 2022-2023 Budget is unveiled in just over three weeks’ time.

Vasco Bastian, the Bahamas Petroleum Dealers Association’s (BPDA) vice-president, told Tribune Business he expects either

tax reductions or margin increases will occur prior to the Budget’s May 25 presentation in the House of Assembly.

He spoke after the Association and its members had a second “successful” meeting with Prime Minister Philip Davis and his economic team, including Senator Michael Halkitis, minister of economic affairs, and Simon Wilson, the Ministry of Finance’s financial secretary, last week. Mr Bastian said this had that moved dealers “closer to the goal posts” on some of their demands.

He added: “I don’t want to get into dollar amounts or percentages or any type of amount right now. All I can tell you is that the Prime Minister is working hard, and working along with the dealers in this country so we can have a better day in this country.

“I know based on our conversations, and based on the various different dialogues in the past two to three weeks, this prime minister is in tune with the economy. He understands the economy and there is hope not only for the gas

station operators but also the motoring public.”

As for the potential ‘relief’ that the Government has talked about, Mr Bastian said: “I don’t know whether it’d be a margin increase or not. But I believe we might look at changing the model, modernising the model.

That’s what I think what the Prime Minister intends to do is modernise the model.

He understands that this model was put in place years ago and has outlived its usefulness.”

Mr Halkitis had previously ruled out increased margins for gas station

hedging programme was still in place if the trades were not executed or, in the event a new structure was implemented, what the rate and lock-in period was. Asking the Government to confirm if the failure to execute in September and December cost BPL some $50m, or provide the correct figure, Mr Pintard also returned to BPL’s “over and under account”.

The way the “over and under account” operates is set out in the Bahamas Electricity Corporation (Amendment) Regulations 2020. These reforms established BPL’s fuel hedging strategy, which sets a target price that is based on the costs and quantities of the various fuels it expects to use. If it runs its more efficient engines for longer than anticipated, and burns lower volumes of cheaper fuel, then the utility enjoys savings that accumulate as reserves in this account.

The “over and under account” was created to operators as “a non-starter”, saying this “would lead directly” to increased gasoline prices at the pump “and that won’t happen right now”. The Association and its members had been seeking a 50 percent increase on their current margins, and shifting the basis for how it is calculated from a fixed, price-controlled sum to a percentage.

Such an increase would take retail (gas station) margins from the present 54 cents per gallon to 81 cents per gallon but, mindful of the impact this will have for transportation-dependent businesses and consumers by further hiking already-high pump prices, Mr Halkitis

offered by the merged firm are accounting, audit, corporate finance, forensic investigation, litigation support, business valuation and advisory services.

Boasting 75 years of licensed practice, the duo said reaching an agreement to merge was a natural course between colleagues who had once practiced together and always remained friends.

The partners said reaction among clients to the merger has been positive. “In some cases, they said, ‘Well, it’s about time’, “ Mr. Galanis said. “They were just happy we were keeping the phone numbers they already knew.” Both companies’ former websites will continue to be active. monitor fuel price movements over the hedge’s year-long period. It is allowed to fluctuate by 5 percent either side of the fixed price at which BPL purchases fuel, and if it exceeds those limits then the fuel charge - presently standing at 10.5 cents per kilowatt hour (KwH) - has to be adjusted.

If BPL’s fuel costs are more than 5 percent below the price it pays for fuel, then the excess savings have to be passed on to the customer. But if fuel costs exceed that purchase price by more than 5 percent, then BPL has to also pass these extra costs on to consumers.

There are concerns it may now be in non-compliance with this aspect of the regulations if it (or taxpayers via the Government) are absorbing millions of dollars in increased fuel costs.

Mr Pintard yesterday queried if BPL had breached that 5 percent margin, and what authority it had relied upon to do so. He also called on the Government to report the current status of the “over and under” account. said the Government will not approve any such rise.

“It’s a very volatile business to be in,” he told reporters previously of the petroleum industry. “We understand that. But I can say that, too, in this environment we look at the whole picture, [and] to seek to increase margins, that would only lead to higher prices at the pump for Bahamians.

It’s safe to say that’s a nonstarter at this time... Raising the margins would lead directly to more increases at the pump, and that won’t happen right now.”

The last time petroleum dealers enjoyed a margin increase was in 2011, when

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PAGE 4, Monday, May 2, 2022

THE TRIBUNE

INVESTMENT PROTECTION FOCUS FOR DIGITAL ASSETS REGULATION

By YOURI KEMP Tribune Business Reporter ykemp@tribunemedia.net THE Securities Commission’s top executive has

foreshadowed the roll-out of more digital asset regulations as it begins focusing on “investment protection” in the cryptocurrency space.

Christina Rolle, the Commission’s executive director,

speaking at the FTX Crypto Bahamas conference, said it was the regulator’s role and mandate to bring “integrity” to the market as a result of the huge

growth in cryptocurrencies worldwide.

“When we started this journey, we saw that the market was in need of clarity,” she added. Ms Rolle said the “journey” towards digital assets regulation in The Bahamas was “different” than in many other countries, adding: “We began around 2017, and began to see interest from the market in looking for a regulatory home.

“It was at that time that I refer to the industry creating a regulatory race, and so in 2018, I think it was at an IOSCO [International Organisation of Securities Commissions] conference that it dawned on me that we need to start looking at this space in earnest to develop the regulatory framework. And when I say looking at the space in earnest, if you can imagine the conversation among securities regulators really was around when it comes to security, and how you treat crypto as a security.”

Ms Rolle said “benchmarking” cryptocurrencies, and understanding what regulators and the private sector both wanted, has been a major issue. “So we developed the legislation with that in mind, but we realised that there were a couple of areas that we wanted to focus on,” she added.

“And so those areas are, particularly, digital asset businesses such as exchanges, custodians, all of those types of digital asset businesses, and then we want to focus on the distribution of tokens and how the token can be registered for distribution. So those were things we knew how to do.”

CHRISTINA ROLLE The Bahamas’ Digital Assets and Registered Exchanges Act was passed in 2020, but Ms Rolle added: “There are some things in the space that have evolved since 2020.

We have just begun to learn more about stable coins, and stable coins have evolved to a point where we would really need to start addressing the investor protection issues.

“Issues such as valuations, disclosures, financial reporting, these types of things, we also see the need to address the De-Fi (decentralised finance) generally. These are issues that are unique to the space. So those are the things that are up next for us. So we’re looking at how we will adjust the framework to adapt to those.”

De-Fi is an umbrella term for the part of the crypto business that is geared

toward building a new, Internet-native financial system, using blockchain to replace traditional intermediaries and trust mechanisms.

“If you really look at the way a lot of the regulatory frameworks have been developed thus far, a lot of them already addressed consumer protection. So I think the next thing is investment protection issues,” Ms Rolle said.

“So issues around custody and how the custodian uses a client’s crypto assets, whether they’re lending them out, whether they get staking, the regulators are now going to have to understand the implications of these issues, which is quite different from the securities market, and how to adapt to address defence and protection concerns with these types of issues.”

THE TRIBUNE

Monday, May 2, 2022, PAGE 5

Hope and Fear

By CHRIS ILLING Business Developer ActivTrades THE recovery on the European financial markets continued vigorously in the second half of last week.

Good corporate balance sheets and low prices beat fears of war and the return of COVID lockdowns.

Apple has significantly exceeded expectations.

Apple’s share price initially rose around 2 percent after the trading session.

The tech giant posted net income of $25bn and earnings per share of $1.52, which was nine cents better than expected.

On Thursday, the hesitant recovery of the stock markets from Wednesday continued with momentum. The Dax index once again exceeded the 14,000point mark. At noon, the leading German index was up around 1.8 percent at 14,045 points. The broader European leading index, Euro Stoxx 50, rose by 1.8 percent to 3803 points. The good quarterly figures of many companies convinced investors. In addition, there were cheaper prices after the weak stock market in the first half of the week.

The shock of the Russian gas supply halt for Poland and Bulgaria seems to have been digested for the time being.

Futures transactions on the American stock indices pointed to a friendlier end of the week. The Dow Jones index of blue chips was expected to be 0.9 percent higher, with the broader S&P 500 even 1.5 percent higher. American technology stocks also seem

to have survived the sell-off of the past few days. Investors expected the Nasdaq 100 technology index to rise by 2 percent.

The euro continued to struggle to break out of its downward movement. The currency briefly fell below $1.05 in the morning. On April 28, one euro cost $1.0533, 0.2 percent less than the day before. Other currencies are also coming under increasing pressure. The British pound fell against the dollar to its lowest level since July 2020. The dollar exchange rate exceeded 130 yen for the first time in 20 years on Thursday. The Japanese central bank had announced that it would stick to its loose monetary policy to continue to support the economy. Their goal remains to keep inflation in Japan stable above 2 percent.

The price of oil stagnated on Thursday. The American crude oil type, WTI (West Texas Intermediate), was priced at $102.19 per barrel, almost no change from the previous day. At $105.54, the North Sea variety, Brent crude, was around 0.4 percent more expensive than on Wednesday. Gold cost 0.15 percent more at EUR 1,794.78 per ounce.

But the fear that this recovery is only short lived is very real.

HOPE AND FEAR

RBC UNVEILS RELOCATION OF ITS PALMDALE BRANCH ROYAL Bank of Canada (RBC) is relocating its Palmdale branch to the newly-constructed Collins and Sixth Commercial Complex, which is due to open “in the latter part” of 2022.

“The new physical location, our Collins and Sixth branch, will be designed to a new, full-service, digitally-enabled and advice-oriented branch format,” said LaSonya Missick, RBC’s managing director and vice-president of personal banking.

“With the coronavirus pandemic, we recognise that Bahamians began adapting to our digital banking options. Clients are turning to digital channels for their every day transactions and leveraging our branch network for more complex financial advice, like buying a home or car, investing for retirement, or saving for their children’s education.

“As our client’s banking needs and preferences evolve, we are positioning the bank for the best possible success while reflecting the new reality we’re operating in.”

RBC said the Collins and Sixth branch will provide the same services and solutions that clients have become accustomed

to, complemented by the flexibility and convenience of its digital and mobile services.

The Canadian-owned bank added that it continues to invest in its digital and physical infrastructure, both in The Bahamas and across the Caribbean. In November 2020, it re-opened its fully-renovated Freeport branch and, in April 2021, began operations in its new Marsh Harbour branch after both sustained significant damage during Hurricane Dorian.

RBC also relocated its Carmichael branch to a digitally-enabled location at Southwest Plaza in September 2021.

“This relocation reinforces RBC’s commitment to the economic and financial growth of The Bahamas. We regularly review our operations across the Caribbean to ensure we are aligned with our clients’ needs, with a view of improving our performance. The Bahamas market is an important part of RBC’s overall strategy as we continue to focus our efforts where we see potential and invest in innovation for sustainable growth,” Ms Missick said.

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Meanwhile, in Beijing, queues in front of the supermarkets, empty shelves,

overwhelmed delivery services and people in white body suits are everywhere.

Scenes are currently playing out in the Chinese capital that were seen in Shanghai in March before the big lockdown. The government wants to prevent a lockdown in China’s capital at all costs. But in Beijing, mass tests are causing

panic. The resentment of the people is growing.

The trigger for panic buying in Beijing last Sunday evening was the instruction that all threeand-a-half million residents in the capital’s largest and richest district, Chaoyang, had to be tested for COVID-19 on Monday.

The mass tests were

repeated three times last week. The Chinese financial markets share this fear.

After the central bank cut interest rates on Monday, the yuan fell further on Thursday to its lowest level in 18 months. Since the beginning of the month, the currency has fallen 4 percent - the fastest in 30 years.

PAGE 8, Monday, May 2, 2022

THE TRIBUNE

BANK WIPES OUT $30M LOSS IN THREE MONTHS

FROM PAGE ONE

effectively overturned the losses the bank recorded for the full year of 2021.

Our loan assets and deposits are up, and our capital and liquidity positions are strong.

“In terms of loan originations, we saw improved credit demand year-on-year and, more importantly, significant improvement in the credit quality of our loan assets. The bank’s non-performing assets were reduced by quarter-end, and we had recoveries during the quarter which were at historically high levels for the bank, more than doubling budgetary expectations.”

Commonwealth Bank’s 2022 first quarter outcome represented a more than$33m positive turnaround from the $2.679m loss incurred during the same period in 2021, when the institution was grappling with COVID’s impact on the ability of borrowers - many of whom were still either unemployed or under-employed - to service their loans and meet their obligations.

“While the bank reported a net loss of $3m in the first quarter of 2021 because of the unprecedented impact of the COVID-19 pandemic, historically the bank has reported average first quarter results in the past ten years of $12m [profit],” Ms Albury said, putting the

strength of 2022’s performance into context.

“On that basis, this has been the best first quarter in the recent ten-year history of the bank as the country moves closer to post-pandemic recovery. Having said that, the first quarter of 2021 was the worst first quarter over this historic period, and 2021 was the first year the bank had recorded a net loss owing to the COVID-19 health and economic crisis.”

Stripping out the $17.403m loan loss impairment reversal, a positive, would still leave Commonwealth Bank with a $13m profit for the 2022 first quarter that would be in line with historical trends.

And the outturn for the first three months of this financial year was also achieved despite a $1.5mplus increase in general and administrative expenses, which rose by 10.5 percent to $17.642m compared to $15.958m the year before.

The commercial bank, which largely specialises in personal or consumer credit, saw a modest near$10m expansion of its loan portfolio during the first three months of 2022 to $777.221m. Total assets grew by 3.7 percent to $1.78bn, largely due to a rise in cash and deposits at other banks, while deposits rose more slowly to $1.493bn at quarter-end.

While the reversal of COVID-related loan impairments is expected to slow over the remainder of 2022, and “cease” by year-end, Ms Albury said Commonwealth Bank was starting to renew its focus on the “organic growth” of its loan portfolio moving forward.

“The bank has a $17m reversal of the loan impairment expense through to the quarter-end, as compared to the same period in 2021, which reflected a loan impairment expense of $21m,” she added. “We believe that opportunities still exist for further milder reversals over the coming months as the economy improves from the COVID-19 pandemic, and employment and work hours continue to improve for Bahamians, in particular those in the tourism and leisure sectors.....

“The focus of the bank is on organic growth as the reversal of impairment losses is not a permanent financial outcome.

We expect that these will cease by the end of the year and that the bank will move towards normalized lending and deposit relationships....

As more of our customers experience increased work hours, the bank’s credit risk has declined and there is an improvement in the credit quality of the bank’s loan portfolio.”

Pledging that Commonwealth Bank will not

NOTICE

“cherry pick” which segments of Bahamian society and commerce to lend to, Ms Albury said the majority of its clients wanted to “right-side” their financial affairs post-COVID and become current again with their loan payments. They recognised that this will ensure they maintain access to credit in future, especially as The Bahamas’ first-ever Credit Bureau starts to ramp up operations.

“We believe that the vast majority of our customers want to be in a position, should financial needs arise, to call on their good credit reputation to advance further credit. This is particularly valuable as the Credit Bureau moves away from its infancy stage and is fully integrated into the credit approval process,” Ms Albury said.

Acknowledging rising inflation’s impact, she added that Commonwealth Bank’s operating costs will be impacted in areas where no pre-existing contracts were in place to lock-in prices.

And borrowers whose loan repayments are not secured by salary deductions could also encounter difficulty in servicing their obligations due to the surging cost of living.

“To the extent we do not have previously negotiated contract costs, there is no doubt that the cost of operating will be impacted,” Ms Albury said. “Recognising the difference between

‘sticky’ inflation, that is those goods and services whose prices are slower to change, and ‘flexible’ inflation, where the goods and services respond almost immediately, we have not seen a material impact on our operations during the first quarter of 2022.

“For borrowers who service their loans through salary deduction, we are not expecting to see a change in their credit behaviours, but in other circumstances these borrowers may be challenged and we encourage them to reach out to bank representatives directly to get the assistance we can provide.”

And, in a boost for the Government, which has to refinance $1.9bn-plus in domestic Bahamian dollar debt due to mature this year, Ms Albury said Commonwealth Bank was committed to rolling-over and reinvesting in public securities to maintain its existing portfolio worth more than $600m.

“The bank invests over $600m in support of The Bahamas government through its investment in debt of various tenors, and continues to reinvest at maturity of its existing holdings,” she added. “Downside risk to the bank is the financial stresses of the Bahamas government and the perceived downgrade in creditworthiness by international rating agencies.

“Therefore, the bank activity manages its Bahamas sovereign debt portfolio, both in terms of the aggregate dollar value of its exposure and tenors of that exposure across the portfolio.” Commonwealth Bank, in common with its commercial counterparts, has had to discount the value of its government debt holdings due to the increased risk created by The Bahamas’ debt burden and rating downgrades.

“Our goal is certainly to remain profitable in 2022.

Given the great start to the year and the potential for an expanded recovery of the economy, while being mindful of the unfavourable conditions related to elevated levels of inflation, supply chain disruptions and the war in Ukraine, we have considered it necessary to revise our initial budgetary expectations during this second quarter,” Ms Albury said, although no details were provided on what these are.

TO ADVERTISE TODAY IN THE TRIBUNE CALL @ 502-2394

NOTICE

NOTICE is hereby given that IKENNA DELVIN NWANKWO of #3 Setton Street, Chippingham, P.O. Box N3353, Nassau, The Bahamas is applying to the Minister responsible for Nationality and Citizenship, for Registration Naturalization as a citizen of The Bahamas, and that any person who knows any reason why registration/ naturalization should not be granted, should send a written and signed statement of the facts within twenty-eight days from the 25th day of April, 2022 to the Minister responsible for nationality and Citizenship, P.O. Box N-7147, Nassau, New Providence, The Bahamas.

NOTICE is hereby given that ITALIA PHISSIEN-ST. FELIX of Harbour Island, Eleuthera, The Bahamas is applying to the Minister responsible for Nationality and Citizenship, for Registration Naturalization as a citizen of The Bahamas, and that any person who knows any reason why registration/ naturalization should not be granted, should send a written and signed statement of the facts within twentyeight days from the 26th day of April, 2022 to the Minister responsible for nationality and Citizenship, P.O. Box N-7147, Nassau, New Providence, The Bahamas.

MARKET REPORT www.bisxbahamas.com

FRIDAY, 29 APRIL 2022

BISX ALL SHARE INDEX: BISX LISTED & TRADED SECURITIES 52WK HI 6.70 53.00 2.05 2.90 2.60 6.05 10.05 3.50 9.02 3.10 7.50 14.00 2.71 10.25 11.25 10.75 15.00 4.38 10.00 16.50

52WK LOW 4.75 32.12 1.46 2.20 1.30 5.50 6.96 2.82 4.25 2.27 5.50 9.75 1.99 6.50 10.02 9.01 13.10 3.60 8.00 15.50

SECURITY AML Foods Limited APD Limited Benchmark Bahamas First Holdings Limited Bank of Bahamas Bahamas Property Fund Bahamas Waste Cable Bahamas Commonwealth Brewery Commonwealth Bank Colina Holdings CIBC FirstCaribbean Bank Consolidated Water BDRs Doctor's Hospital Emera Incorporated Famguard Fidelity Bank (Bahamas) Limited Focol Finco J. S. Johnson

PREFERENCE SHARES 1.00

1.00

1000.00 1000.00 1000.00 1000.00

1000.00 1000.00 1000.00 1000.00

1.00 10.00 1.00

1.00 10.00 1.00

Bahamas First Holdings Preference Cable Bahamas Series 6 Cable Bahamas Series 8 Cable Bahamas Series 9 Cable Bahamas Series 10 Colina Holdings Class A Fidelity Bank Bahamas Class A Focol Class B

CORPORATE DEBT - (percentage pricing) 52WK HI 100.00 100.00

52WK LOW 100.00 100.00

SECURITY Fidelity Bank (Note 22 Series B+) Bahamas First Holdings Limited

CLOSE

CHANGE

%CHANGE

YTD

YTD%

2279.24

1.82

0.08

51.00

2.29

SYMBOL AML APD BBL BFH BOB BPF BWL CAB CBB CBL CHL CIB CWCB DHS EMAB FAM FBB FCL FIN JSJ BFHP CAB6 CAB8 CAB9 CAB10 CHLA FBBA FCLB SYMBOL FBB22 BFHB

BAHAMAS GOVERNMENT STOCK - (percentage pricing) 115.92 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.54 99.98 100.00 100.00 100.00 100.00 100.00 100.98 100.00

104.79 100.00 100.00 100.00 100.00 100.00 100.00 100.00 91.00 100.00 99.98 91.00 90.95 89.02 89.62 89.00 90.24 90.73

MUTUAL FUNDS 52WK HI 2.52 4.69 2.22 207.86 212.41 1.73 1.83 1.82 1.05 9.37 11.83 7.54 16.64 12.84 10.77 10.00 10.43 14.89

52WK LOW 2.11 3.30 1.68 164.74 116.70 1.68 1.73 1.75 0.99 6.41 7.62 5.66 8.65 10.54 9.57 9.88 8.45 11.20

Bahamas Note 6.95 (2029) BGS: 2014-12-7Y BGS: 2015-1-7Y BGS: 2014-12-30Y BGS: 2015-1-30Y BGS: 2015-6-7Y BGS: 2015-6-30Y BGS: 2015-10-7Y BGRS FX BGR125238 BGRS FL BGRS79026 BGRS FL BGRS78024 BGRS FX BGR125238 BGRS FX BGR127139 BGRS FX BGR127149 BGRS FX BGR129249 BGRS FX BGR131249 BGRS FX BGR132249 BGRS FX BGR136150

BAH29 BG0107 BG0207 BG0130 BG0230 BG0307 BG0330 BG0407 BSBGR1252380 BSBGRS790262 BSBGRS780248 BSBGR1252380 BSBGR1271398 BSBGR1271497 BSBGR1292493 BSBGR1312499 BSBGR1322498 BSBGR1361504

LAST CLOSE 5.30 39.95 2.04 2.31 2.25 6.05 9.25 3.30 7.60 2.66 7.16 14.00 2.17 10.25 12.29 10.75 15.00 3.99 10.00 15.50 1.00 1000.00 1000.00 1000.00 1000.00 1.00 10.00 1.00 LAST SALE 100.00 100.00 107.31 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.54 99.98 100.00 100.00 100.00 89.62 100.00 100.00 100.00

CLOSE 5.35 39.95 2.04 2.31 2.25 6.05 9.25 3.30 7.60 2.66 7.34 14.00 2.18 10.25 11.81 10.75 15.00 3.99 10.00 15.50 1.00 1000.00 1000.00 1000.00 1000.00 1.00 10.00 1.00

BISX ALL SHARE INDEX - 19 Dec 02 = 1,000.00 52wk-Hi - Highest closing price in last 52 weeks 52wk-Low - Lowest closing price in last 52 weeks Previous Close - Previous day's weighted price for daily volume Today's Close - Current day's weighted price for daily volume Change - Change in closing price from day to day Daily Vol. - Number of total shares traded today DIV $ - Dividends per share paid in the last 12 months P/E - Closing price divided by the last 12 month earnings

VOLUME 2,000

1,610

10,000 300

0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

CLOSE 100.00 100.00

CHANGE 0.00 0.00

107.31 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.54 99.98 100.00 100.00 100.00 89.62 100.00 100.00 100.00

0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

FUND CFAL Bond Fund CFAL Balanced Fund CFAL Money Market Fund CFAL Global Bond Fund CFAL Global Equity Fund Leno Financial Conservative Fund Leno Financial Aggressive Fund Leno Financial Balanced Fund Leno Financial Global Bond Fund RF Bahamas Opportunities Fund - Secured Balanced Fund RF Bahamas Opportunities Fund - Targeted Equity Fund RF Bahamas Opportunities Fund - Prime Income Fund RF Bahamas International Investment Fund Limited - Equities Sub Fund RF Bahamas International Investment Fund Limited - High Yield Income Fund RF Bahamas International Investment Fund Limited - Alternative Strategies Fund Colonial Bahamas Fund Class D Colonial Bahamas Fund Class E Colonial Bahamas Fund Class F

MARKET TERMS

CHANGE 0.05 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.18 0.00 0.01 0.00 (0.48) 0.00 0.00 0.00 0.00 0.00

(242) 323‐2330 (242) 323‐2320 EPS$ 0.239 0.932 0.000 0.140 0.070 1.760 0.369 -0.438 0.140 0.184 0.449 0.722 0.102 0.467 0.646 0.728 0.816 0.203 0.939 0.631 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000

VOLUME

250

NAV 2.52 4.69 2.21 197.44 202.39 1.73 1.82 1.82 0.99 9.37 11.79 7.54 15.94 12.47 10.74 N/A 10.43 14.89

DIV$ 0.170 1.260 0.020 0.080 0.000 0.000 0.260 0.000 0.000 0.120 0.220 0.720 0.434 0.060 0.328 0.240 0.540 0.120 0.200 0.610 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000

INTEREST Prime + 1.75% 6.25% 6.95% 4.50% 4.50% 6.25% 6.25% 4.50% 6.25% 4.25% 5.00% 4.53% 4.50% 5.00% 5.00% 5.50% 5.55% 5.60% 5.65% 5.69% YTD% 12 MTH% 0.99% 4.22% 0.36% 5.78% 0.67% 2.74% -2.97% -2.35% -4.72% 6.04% 0.83% 2.82% -0.18% 3.72% 0.76% 3.55% -3.55% -3.85% -0.02% 10.36% -0.33% 18.23% 0.22% 3.05% -3.89% 14.76% -1.04% -2.57% 0.81% 4.20% N/A N/A 3.00% 25.60% 7.90% 48.70%

P/E 22.4 42.9 N/M 16.5 N/M N/M 25.1 -7.5 54.3 14.5 16.3 19.4 21.4 21.9 18.3 14.8 18.4 19.7 10.6 24.6 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000

YIELD 3.18% 3.15% 0.98% 3.46% 0.00% 0.00% 2.81% 0.00% 0.00% 4.51% 3.00% 5.14% 19.91% 0.59% 2.78% 2.23% 3.60% 3.01% 2.00% 3.94% 0.00% 0.00% 0.00% 0.00% 0.00% 6.25% 7.00% 6.50%

MATURITY 19-Oct-2022 30-Sep-2025 20-Nov-2029 15-Dec-2021 30-Jul-2022 15-Dec-2044 30-Jul-2045 26-Jun-2022 26-Jun-2045 15-Oct-2022 15-Oct-2038 28-Mar-2026 22-Sep-2024 15-Oct-2038 15-Jan-2039 15-Jan-2049 15-Apr-2049 15-Jul-2049 15-Oct-2049 21-Apr-2050

NAV Date 31-Mar-2022 31-Mar-2022 25-Mar-2022 31-Mar-2022 31-Mar-2022 31-Mar-2022 31-Mar-2022 31-Mar-2022 31-Mar-2022 31-Jan-2022 31-Jan-2022 31-Jan-2022 31-Jan-2022 31-Jan-2022 31-Jan-2022 31-Mar-2021 31-Mar-2021 31-Mar-2021

YIELD - last 12 month dividends divided by closing price Bid $ - Buying price of Colina and Fidelity Ask $ - Selling price of Colina and fidelity Last Price - Last traded over-the-counter price Weekly Vol. - Trading volume of the prior week EPS $ - A company's reported earnings per share for the last 12 mths NAV - Net Asset Value N/M - Not Meaningful

TO TRADE CALL: CFAL 242-502-7010 | ROYALFIDELITY 242-356-7764 | CORALISLE 242-502-7525 | LENO 242-396-3225 | BENCHMARK 242-326-7333

LEGAL NOTICE

N O T I C E EXXONMOBIL EXPLORATION AND PRODUCTION GREECE LIMITED N O T I C E IS HEREBY GIVEN as follows: (a) EXXONMOBIL EXPLORATION AND PRODUCTION GREECE LIMITED is in dissolution under the provisions of the International Business Companies Act 2000. (b) The dissolution of the said Company commenced on the 28th day of April, 2022 when its Articles of Dissolution were submitted to and registered by the Registrar General. (c) The Liquidator of the said Company is Rebecca L Wittrock, of 22777 Springwoods Village Parkway, Spring, Texas 77389, U.S.A.2 Dated the 2nd day of May, A.D., 2022 HARRY B. SANDS, LOBOSKY MANAGEMENT CO. LTD. Registered Agent for the above-named Company LEGAL NOTICE

N O T I C E EXXONMOBIL EXPLORATION AND PRODUCTION GREECE LIMITED Creditors having debts or claims against the above-named Company are required to send particulars thereof to the undersigned c/o P.O. Box N-624, Nassau, Bahamas on or before 25th day of May, A.D., 2022. In default thereof they will be excluded from the benefit of any distribution made by the Liquidator.

Dated the 2nd day of May, A.D., 2022.

Rebecca L. Wittrock Liquidator 22777 Springwoods Village Parkway Spring, Texas 77389 U.S.A.

THE TRIBUNE

Monday, May 2, 2022, PAGE 9

‘TREMENDOUS IGNORANCE’ ON VAT BREADBASKET ROW FROM PAGE ONE which further worsened the unfairness of what is already a regressive consumptionbased tax that imposed more of a burden on low income Bahamians.

Pointing to multiple studies and empirical evidence that all favoured The Bahamas maintaining a broad-based, low-rate and efficient VAT with minimal zero ratings and/or exemptions, Mr Bowe said the consensus was that redistributing what wealthier persons paid in VAT on breadbasket items to the poor via social security assistance was a better, more targeted way of assisting those struggling with the cost of living.

Calling for the adoption of “a Robin Hood mentality” when it came to redistributing some VAT collections, he argued that the breadbasket item debate must be approached “from the point of knowledge, study and information, not uninformed, ignorant and emotional”. The real question that should be asked, the Coalition head

added, was whether the Davis administration had reinstated the RISE social security initiative to effect such redistribution.

Speaking after a week when calls to yet-again eliminate VAT on breadbasket items provoked a heated House of Assembly row, Mr Bowe told this newspaper: “It disappoints me, because our politicians demonstrate a tremendous amount of ignorance about policies they should be wellinformed about.

“We allow politicisation of matters to overcome the facts and empirical evidence.

I may be accused of being somewhat dismissive, but I have extreme difficulty with why people cannot see putting exemptions on breadbasket items is counter-productive to what the objective is.

“If you zero rate breadbasket items, are you solely zero rating it for individuals deemed to be in need, or for everyone and allowing those persons with resources to pay taxes to benefit from tax concessions also.” Mr Bowe said VAT zero ratings

and exemptions were a poor, inefficient mechanism for targeting assistance to those who required it because it provides tax breaks to everyone - rich and poor.

And, with VAT and other regressive consumption-based taxes already disproportionately impacting lower income Bahamians because they spend a greater portion of their earnings in taxes, he added that blanket tax breaks that benefit all only served to further the system’s inequity.

“If I grant tax concessions, I am worsening that progressivity because I am granting further exemptions to individuals already benefiting from a regressive tax system who are low income earners,” Mr Bowe told Tribune Business.

“The argument between the political parties is seriously misguided.

The argument should be: Did the Government honour the commitment to implement the RISE programme or its equivalent, where it would redistribute the excess revenues from those who can

afford to pay to those who have difficulty to pay.”

Using the example of a $100 spend at the food store, Mr Bowe said some $7.50 would have been paid in VAT if this was fully spent under the low-rate, broad-based VAT model introduced by the Christie government in 2015. Its Minnis successor, though, in 2018 raised the VAT rate to 12 percent while implementing a host of exemptions and zero ratings on breadbasket items, medicines and the like.

With breadbasket items said to translate into up to 40 percent of food store sales, the Coalition chief said this - and the 12 percent rate turned into $7.20 in VAT on a $100 spend. The difference with the initial 7.5 percent was negligible and, with the Davis administration reverting to a 10 percent, broad-based VAT with no zero ratings and exemptions, that results in $10 VAT becoming payable.

While this represents a $2.80 VAT rise from the Minnis administration’s model, Mr Bowe said the

latter ignored the fact that wealthy persons were not only enjoying the same tax break on 40 percent of food purchases but likely spending far more than lower income persons per grocery store visit. Now, the $2.80 difference can be redistributed to help those struggling with inflation and the soaring cost of living.

“We need to tax all persons and implement the Robin Hood mentality of taking from those who have and redistributing to those who don’t have,” Mr Bowe told Tribune Business. “I don’t understand how it cannot be grasped that the wealthy person, their consumption of breadbasket items is going to be higher than persons on the margins because they have more to spend....Granting them that exemption is wholly inefficient in addressing the system of inequality that exists.”

The Opposition has frequently sought to portray the Government as heartless and uncaring for refusing to eliminate VAT on breadbasket items as a means to offset

some of inflation’s impact, but Mr Bowe argued this and associated rows - had more to do with politics than any real care or empathy for lower income Bahamians.

He pointed out that multiple studies conducted for the Government and private sector by Compass Lexecon and Oxford Economics, respectively, as well as agencies such as the Inter-American Development Bank (IDB), had all recommended that a lowrate, broad-based VAT was the preferred choice for The Bahamas with zero ratings and exemptions kept to a minimum to maintain the tax’s integrity and efficiency.

“The quality of our debate, this is where we don’t realise the rest of the world is watching and listening,” Mr Bowe said. “When we’re having these discussions and debates, we should be demonstrating clearly from the point of knowledge, study and information.

Not uninformed, ignorant and emotional.”

THE TRIBUNE

Monday, May 2, 2022, PAGE 11

CLOSING THE CIRCLE: GETTING TO THE ROOT CAUSES OF CRIME FROM PAGE TWO

back to the drawing board and think about how to execute solutions that will address the challenges we have already identified.

This must go beyond youth intervention and outreach programmes. While the success of such interventions has been proven to have an impact, we need to dig deeper. By using the NDP as our starting point, we must put in place policies/laws that will begin to curb social behaviours that have been known to lead to higher crime rates. Policies and strategies should focus on the following areas.

1. Targeted programmes that reduce risk factors for families and communities of criminals. We often look at targeting areas known for crime by increasing police presence and patrols. But understanding the socio-economic conditions of what these men and women are facing would help us build strategies that would improve their wellbeing. These programmes must also follow strict accountability guidelines and reporting to ensure efforts and sponsors are not being wasted.

2. Crime is a public health issue, and has been recognised as one for many

years. Research has found that “people can be exposed to violence in many ways.

They may be victimised directly, witness violence and property crimes in their community, or hear about crime and violence from other residents”. Therefore, when we aim to treat crime, we must also consider the risk factors for all parties involved: Family, friends, community. We often overlook mental health issues that are carried on through generations, and which continue to raise a community or household or criminals. But it these very same issues that we should be deciphering to get a true

picture of what a criminal is faced with on a day-to-day basis. With this data, we can help others improve parenting, household structure and family goals.

3. Arms trafficking is still rampant in The Bahamas, and we seem to think that it only exists in certain places. But gun violence impacts all of us. We are not taking this issue seriously enough.

Earlier this year, the government of Jamaica proposed that a person convicted of illegal possession of a firearm must serve at least 15 years in prison before becoming eligible for parole. This is part of the country’s robust

framework to combat crime.

This type of law has proven results and it will work for us in The Bahamas if we decide to step up. Some may argue that this seems harsh, but unless you glorify the lifestyle of criminal behaviour, drug trafficking and gangster love, then this penalty is fitting.

Conclusion There is no easy way to solve a complex problem such as crime. We have several programmes in place, we have improved reporting efforts, and we are trying.

But crime-fighting must be a huge societal effort where everyone shares a responsibility in shaping the mindset

ATLANTIS LAUNCHES SEAPLANE TIE-UP WITH KAMALAME CAY FROM PAGE ONE and to announce our partnership with Kamalame Cay and Coco Bahama Air and our inaugural flights.

“These exclusive experiences have been part of our long-term vision of constantly expanding choices for our guests. The Atlantis brand was built on entertaining guests and offering experiences unlike no other.

This is another chapter in our book.”

Ms Oswell said Atlantis expected to “increase” the three round-trip flights per week to Kamalame

Cay later this year. Asked whether the resort plans to add to its Family Island excursion menu, she reiterated: “At the core of the Atlantis brand is the ability to provide our guests with experiences like no other.

We are constantly adding new experiences. That is what makes Atlantis unique.

So yes, of course, there will be more to come in the future.”

The planned expansion includes seaplane excursions, via Coco Bahama, to Spanish Wells and Harbour Island that will begin later this year. Explaining

the rationale for teaming with Coco Bahama and Kamalame Cay, Ms Oswell said: “Our guests have been returning for years. Many of our guests refer to our Atlantis team members as ‘family’. We know our guests make memories of a lifetime at our resort.

“But we also know The Bahamas’ bounty of culture, art and our environment’s endless splendor exists among our sister islands.

Why wouldn’t we want to share all of The Bahamas with our visitors? We are thrilled to offer access to

even more of our beautiful country to our guests.”

“David Hew and Michael King-Hew [Kamalame Cay principals] are incredible partners and, like Atlantis, are both stewards of the environment and provide the utmost authentic Bahamian hospitality,” Ms Oswell continued. “Guests will be chauffeured from Atlantis to Odyssey for this itinerary and fly with Coco Bahama Air. “In-flight, travellers will be treated to a spectacular overwater sightseeing tour of the Andros Great Barrier Reef and vast oceanic

panoramas. In addition, there is a series of offerings to choose from to explore Andros from land and sea, plus a special can’t miss ‘seato-table’ lunch under the palapa to round out the day.

Guests will return to Odyssey in Nassau in the late afternoon.”

Besides the tie-up with Kamalame Cay and Coco Bahamas, Ms Oswell also hailed Atlantis’ partnerships with other airlines and tour operators - specifically Tropic Ocean Airways and Pieces of 8. The latter, the tour boat operator, now has “a a brand-new dock at

‘NO TIME TO CELEBRATE’ ON BETTER FISCAL SIGNS FROM PAGE ONE weekly media briefing on Friday, gave an insight into the fiscal reports set to be released this week. He indicated that the Government’s revenues were ahead of target, standing at $1.8bn or 78 percent of the projected full-year amount with threequarters of the fiscal year gone, while spending was 3 percent below forecast.

The statistics also indicated that the Government was set to beat its full-year deficit forecast of over $850m by a significant amount, as the amount by which spending exceeded revenues for the first nine months to end-March 2022 stands at $345m.

“The numbers are positive, but obviously we need the entire report to get the full context,” Mr Edwards told this newspaper. “We don’t yet fully appreciate what they are, and we have to bear in mind that the

Government accounts on a cash basis, and that may have an impact on where the numbers are.

“If the numbers hold true, and are what we go into the end of the fiscal year with, we are in a much better place than during the last two years. The trajectory of the deficit is moving in a positive way compared to the last two years, and that will be something to hang their hat on going into the new Budget cycle and augurs well for the Government to perhaps even create more headroom for fiscal policy.

“I wouldn’t celebrate at this time, but I would feel positive about it. It’s one of those that you have to keep your fingers crossed and hope it holds true through the end of the fiscal year.”

Kwasi Thompson, who was effectively Mr Halkitis’ predecessor as last minister of state for finance in the Minnis administration, echoed Mr Edwards

GAS STATIONS HOPE FOR INDUSTRY ‘MODERNISING’ FROM PAGE THREE the Hubert Ingraham-led Free National Movement (FNM) government granted a 10 cent increase per gallon of gasoline to take it from 44 cents to 54 cents. A 15 cent increase per gallon of diesel was also allowed. The Government itself currently collects over $1.60 for every gallon of gasoline sold in The Bahamas.

Mr Wilson, though, previously hinted that an alternative to margin increases/adjustments may be to alter how the industry’s Business Licence fee is calculated. The latter is based on gross turnover.

While the gas station operators enjoy a “concessionary rate”, as a high turnover/ low margin operation they are penalised by how it is calculated.

When oil prices soar, their turnover goes up because of higher costs incurred in purchasing the fuel they sell, but net revenues stay the same because of the fixed margins. As a result, they end up paying more in Business Licence fees but net revenues stay the same no matter what.

“It gives the impression revenues are high, but revenues are tied to the 54 cents they get,” Mr Wilson added. “There were discussions around that, there were discussions around what type of support the wholesalers can provide in this environment....

“It was an open and frank discussion. What they really wanted from the Government was to say we don’t

want a band aid; we want a permanent solution. Yes, fuel prices are going to trend down eventually. But we want a permanent solution.

We don’t want a band aid where we do a quick fix here and two years from now, three years from now, we’re back here trying to find out what is the right solution.”

Mr Halkitis, speaking on Friday after Thursday’s meeting, added: “We met with them about a week-anda-half ago and we had some initial discussions. They presented a proposal to us. We had a meeting again (Thursday), and they presented some additional proposals to the Government.

“We are looking at ways, and the Prime Minister attended the meeting, and he said to them that he’s committed to bringing some relief to them, but it’s just a matter of working out how best to do it so that they can get the relief. They presented some more proposals yesterday (Thursday) and we undertook to go and study them, and to come back to them with a position, hopefully to assist them effectively before we get to the Budget in the next two weeks or so.

“We have to be mindful of the impact on the consumer when we speak about any margin increase; the impact on the consumer and the public, and so we’re trying to find a way how we can bring some relief to them without negatively impacting the Bahamian public, but I will say the spirit of the discussions was very positive.”

by saying of the released figures: “It is not cause to celebrate. We have not seen any help for the ordinary citizens to address the inflation crisis. Our numbers mean very little to the ordinary Bahamian unless they are used to provide the needed relief. Bahamians are suffering without relief.”

Calling on the Davis administration to reveal whether it will follow its predecessor in providing a VAT holiday to help reduce the cost of preparing for hurricane season, especially with the “escalating prices”seen now, Mr Thompson asserted that the Government was reaping the benefits of “an economy that was roaring back to life” under the Minnis administration.

Pointing out that revenues were already ahead of projections by $92m for the 2021-2022 fiscal year’s first quarter, which had just two weeks to run before the Minnis administration was

voted out of office, the east Grand Bahama MP said it was little surprise that the Government’s income was running ahead of forecast.

And he accused the Davis administration of “fiscal indiscipline”, and having no appetite for fiscal prudence despite it being too early to assess the effects of the VAT rate cut to 10 percent. “From all indication the Government is on a reckless spending spree, with an untold number of hirings, unchecked international travel and dozens of contracts for works and services fully ignoring the legal requirements for competitive bidding and public publication of contracts,” Mr Thompson said.

The Ministry of Finance has already touted a 26 percent VAT revenue increase, compared to pre-COVID numbers, for the first two months of calendar 2022 as a signal that the rate cut has not

impacted government revenues. Simon Wilson, the financial secretary, previously said the $212.6m in combined VAT revenues collected for January and February 2022 exceeded sums collected during the same two months in 2020 by some $47.1m.

Using those two months rather than 2021 comparatives, as the former represented pre-pandemic figures, he said VAT revenues had “increased dramatically” despite the Davis administration cutting the rate from 12 percent to 10 percent with effect from January 1, 2022.

“For the period January and February 2022, total VAT collected was $212.6m,” Mr Wilson said, comparing this to the $165.5m collected during the same two months in 2020. “Even though we had reduced the VAT rate from 12 percent to 10 percent, we experienced a $47.1m or

and attitude towards criminal behaviour. We must recognise the mistakes of our past and keep an open mind to what we should start doing differently, starting in the home. While it is important to push for economic growth, better wages and less unemployment, it is equally important to strive for better, challenge bad parenting and societal norms, and stand our ground despite even the most tiring circumstances.

No one is perfect but we have a choice no matter how hard things are. the Atlantis marina. Guests can access a wide range of boat tours and experiences, including half-day tours to Rose Island”.

As for Tropic, Ms Oswell said: “South Florida is one of our largest markets. For that reason, Atlantis and Tropic Ocean Airways now offer long weekend fly and stay packages – departing from Fort Lauderdale/Hollywood to Odyssey in Nassau. Travellers have access to both private and semi-private charters on a Thursday to Monday schedule.”

Atlantis has also launched its Sapphire Services package to offer guests a variety of concierge experiences throughout their stay at the resort.

25.8 percent increase in VAT collections.

“The VAT decrease has not led to an overall decrease in VAT revenue.

The VAT performance has actually increased dramatically. Some of that was because of the increase in economic activity because of the economy’s re-opening. Some of that is because of our revenue administration efforts, and some of that is because the lower VAT rate encouraged more consumption.”

However, given that VAT payments and filings are submitted to the Government some 21 days after the relevant month closes, informed sources have queried whether the January VAT figure actually represents December collections when the rate was still 12 percent.

And they pointed out that the Government typically incurs significant spending in the fiscal year’s final quarter, between April and June, as all agencies, departments and ministries rush to present invoices and bills that must be paid before the fiscal year closes to the Ministry of Finance.