‘Quality new credit’ hard to find with $127m drop

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net

FIDELITY Bank (Bahamas) says the more than $127m collective decline in outstanding mortgage and consumer loans during 2022 shows “quality new credit” and borrowers will be tough to find despite the economy’s rebound.

The BISX-listed bank, in its just-released report ahead of tonight’s 2022 annual general meeting (AGM), said it is aiming to increase non-interest earnings from 10.64 percent to 20 percent of total income in a bid to counter the decline in traditional loan-related income sources that Bahamian commercial banks have relied upon to drive profitability and growth.

“Statistics from the Central Bank of The Bahamas report that consumer loans and mortgage loans outstanding with commercial banks as of December 31, 2022, decreased by $89m and $38.1m compared with December 31, 2021, which demonstrates that the availability of quality new credit is limited even as the economy of The Bahamas experiences its rebound,” Fidelity Bank (Bahamas) warned shareholders.

“Since the peak of the global pandemic, when furloughs and unemployment, particularly in the tourism sector, led to significant increases in the number of loans and advances to customers that fell into delinquency, the yeoman’s effort by the bank during the past two years led to the rehabilitation of a significant number of such delinquent loans.

“However, certain such loans remain as of yearend and, when combined with the contraction in the primary interest earning assets of the Bank, loans and advances to customers, particularly in the consumer loan portfolio that yields higher interest margins, resulted in a decreased interest income,” bank management added.

“This was offset by the decrease in interest

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By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net

THE CENTRAL Bank is “committed” to launching a product designed to foster a greater “savings culture” among Bahamians before year-end 2023, its governor affirmed yesterday, with approvals “in the final stages”.

John Rolle, in e-mailed replies to Tribune Business questions, said the regulator is aiming to rollout the “savings bond” to small retail investors by the calendar year’s final quarter with the initiative also intended to broaden the base of government securities purchasers.

And, in further local debt market reforms, he added that the October 2023 launch of “competitive bidding” for government bonds, known as Bahamas Registered Stock (BRS), will enable the marketrather than the Central Bank or the Government - to price the latter’s issues in a “more transparent” manner that will ultimately lead to the development of a local yield curve.

Speaking out after the Government, in its recently-released annual borrowing plan, said the long-awaited savings bond will launch in the 2023 third quarter to boost capital markets participation by small investors, Mr Rolle confirmed this timeline and said the product is in “the final stages of approvals”.

“The broad framework has been developed with technical assistance from international consultants who specialise in this area,

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