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

expense as a result of the maturity and redemption of debt securities and other interest rate adjustments. Overall, net interest income for the current year decreased by $328,434 demonstrating that the bank, despite pressures from contraction in its primary line of business, is maximising yield from its interest earning assets.”

To counter this trend, Fidelity Bank (Bahamas) said it will target fee income, which increased year-over-year by more than 65 percent in 2022, moving forward. “The bank has more aggressively pursued penetration in credit, debit and prepaid cards business, including the issuance of cards and the offering of merchant acquiring services; that is, enabling merchants to accept cards as payment for goods and services,” the bank’s management told investors.

“The bank expects to exponentially grow the fees and commissions earned, with an almost direct correlation in growth in profitability, as it increases market share in this business, as defined by usage levels, namely the volume and quantum of transactions involving cards as opposed to the number of cards or merchants given significant elements of the required infrastructure and resources are already deployed.

“The exponential growth materialised in part during the year ended December 31, 2022, with fees and commissions increasing by 65.21 percent over the prior year to $6.145m, with non-interest income now representing 10.64 percent of total income. Continuing the exponential growth in the contribution of non-interest income to total income to a target of 20 percent is considered achievable through solely focusing on value added service offerings, notwithstanding net interest income will remain the overwhelming major contributor to total income.”

Looking ahead, Fidelity Bank (Bahamas) said:

“The prospects for 2023 and beyond remain positive. However, the initial experience with continuing contraction in loans and advances to customers and increased loan delinquency has refortified the resolve of the bank to appropriately diversify its sources of profitability through business expansion, with expansion in presence in the Family Islands front and centre with the impending opening of offices in Exuma.

“Further, macroeconomic projections report returns to pre-COVID-19 GDP levels, but growth this regard, there is room to strengthen market reach with this refined approach.

“This level of transparency would provide the Government with more reliable indicators of market appetite for bond tenors and the timing of offers. It would also bolster the confidence that [investors have] around the development of its annual borrowing plan and annual issuance calendar.”

And, with auction details set to be published after government bond issues have closed, Mr Rolle said: “This is mostly an enhancement around auction details, as the results of bond offerings in the primary market have been published since 2018. Publication of auction results is another key aspect of transparency. This helps to confirm to the market that the process is fairly executed. It would also provide information that help market participants better plan their activities.” thereafter is what is needed. Recent global macroeconomic conditions that unfortunately are inherited by The Bahamas, such as inflation and the risk of recession in major economies, continue to give reason for caution...

“The way commerce is transacted, and the manner in which persons will live, have gone through an irreversible revolution, and accordingly the economies, sectors, industries, businesses and individuals, globally and more specifically in The Bahamas, will not simply recover to preCOVID-19 conditions.”