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MONDAY, OCTOBER 5, 2020
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BOB hit by Central Bank’s 3-year bar By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net
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ANK of The Bahamas’ top executive admitted its risk management had been poor as he revealed the Central Bank has blocked it from taking on new business borrowers for three-plus years. Kenrick Brathwaite, the BISX-listed institution’s managing director, told Tribune Business that events before his appointment meant it was unable to currently rebuild a commercial credit portfolio that he believes remains “really critical” to the bank’s future prospects. “We still have a restriction from the Central Bank with regard to new commercial credit. The restriction has been in place for the last three years, and we cannot take on any new commercial clients. That’s still continuing,” he disclosed.
• Still prohibited from new commercial loans • Top executive admits past risk problems • Banks ‘don’t want to think’ of tourism woe “That part of the business, which is really critical to us in my evaluation, we’re not able to build. That’s because of history, and history suggests that we’ve not done the things we should have done with regard to risk. We’d like to start building more commercial relationships, but we’re still seeking the Central Bank’s authorisation.” Mr Brathwaite, who was appointed to the post some years after Bank of The Bahamas required two taxpayer-financed bail-outs to survive, is the first senior executive or board member at the government-majority owned institution to admit that risk management practices may have been at fault in the run-up to those events in 2014 and 2017.
Oil explorer: We’ve got tourism, fishing covered By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net A BAHAMAS-based oil explorer yesterday reassured that the insurance coverage for its first well will cover any tourism or fisheries losses “in the highly unlikely event” of any spill or environmental impact. Roberta Quant, Bahamas Petroleum Company’s (BPC) environmental scientist, told Tribune Business it had obtained protection “considerably in excess of the minimum levels of cover required by The government” for the Perseverance One well that will be drilled
in waters some 91 miles to the west of Andros near the maritime boundary with Cuba. In written replies to this newspaper’s questions, Ms Quant said the well’s location was not in a Marine Protected Area (MPA) as suggested by environmental activists, adding that its location was some 85 miles from Cay Sal and had been subjected to intense scrutiny that showed “there are no sensitive environmental receptors anywhere near the drill site”.; A 17-year environmental industry veteran, with a
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Three insurers tasked on COVID visitor coverage By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net THE government is seeking to implement by November 1 a COVID-19 travel insurance scheme to cover the treatment/ evacuation costs for any visitor who falls sick in The Bahamas. Dionisio D’Aguilar, minister of tourism and aviation, told Tribune Business last night that he had contacted three separate Bahamasbased health insurers over the past two weeks to assess the feasibility, costs and
structure of such a plan. Speaking after Dr Hubert Minnis revealed this element of the Ministry of Tourism’s strategy in his earlier national address, Mr D’Aguilar said the insurance move was designed to address any difficulties posed should visitors test positive for COVID-19 upon either their arrival at the airport or during their stay. While the experience of other Caribbean countries suggested there were
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Many observers, especially the Bank of The Bahamas minority shareholders who collectively hold just under 18 percent of its equity, will though likely regard Mr Brathwaite’s comments as an understatement given the spectacular destruction of investor value that left more than $144m in accumulated losses on its balance sheet at end-June 2020. Besides risk management, the Central Bank also previously took Bank of The Bahamas to task for its heavy credit exposure to politically exposed persons or PEPS such as ex-Cabinet minister and MP, Leslie Miller, with whom it is locked in a court battle over $30.6m it alleges he owes
over loans secured on the Summerwinds Plaza. The taxpayer has also, at a conservative estimate, spent over $300m in propping up Bank of The Bahamas through a combination of the two bail-outs, which injected government bonds worth $100m and $167.6m, respectively, into its balance sheet, plus a $40m rights offering that had to be 100 percent acquired by the Public Treasury. The latter, together with the National Insurance Board (NIB), owns 82-plus percent of the bank on the government’s behalf. Bank of The Bahamas’ commercial loan portfolio shrunk by almost $5m during the 12 months
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Bahamasair’s revenue off a ‘staggering’ $32m By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net BAHAMASAIR’S “staggering” financial losses continue to mount, its chairman revealed yesterday, disclosing that revenues for its just-completed 2020 financial year were down $32m compared to 2019. Tommy Turnquest, giving a bleak near-term outlook for the national flag carrier, told Tribune Business that passenger numbers and load factors on its domestic routes are “dismal” with as few as six persons travelling on its service between Nassau and Freeport. He added that the airline had cut back its weekly number of flights “like 90 percent”, with the 22 to 26 presently scheduled equivalent to what it used to do per day prior to the COVID-19 pandemic. With Bahamasair presently confined to servicing its domestic inter-island routes only, Mr Turnquest said it had yet to look at restarting its international flights into the US and other Caribbean destinations given the government’s continuing concerns over the rate at which COVID-19 infections are increasing on New Providence.
TOMMY TURNQUEST With memories still fresh about how the second domestic COVID-19 wave was sparked by Bahamians returning from travelling to Florida and elsewhere, Mr Turnquest said the national flag carrier simply lacked the “economies of scale” of an American Airlines to begin pre-flight virus testing of passengers before they boarded the plane. “They’re still very, very low,” the Bahamasair chairman said of passenger numbers on the airline’s domestic flights. “For example, we went into Marsh Harbour this morning, and I guess we had about 15 and brought back 21-22m, either on a 70-seater or 50-seater. “We combined Rock Sound and Georgetown on a 70-seater, and had 21 passengers total. On Nassau to
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