First Minority Nominated Director Elected to Board of Directors

The Government has agreed to allow the special purpose vehicle Bahamas Resolve Ltd. (Resolve) to acquire $166 million in impaired commercial loans from Bank of The Bahamas Limited, shareholders learned on Wednesday evening at the Bank’s Annual General Meeting held at Breezes Resort on Cable Beach. According to Wayne Aranha, Chairman of the Bank, this support from the Government will cure the Bank’s capital deficiencies.

Mr. Aranha said the loans will be purchased at gross book value and the consideration for this purchase would be the issuance of Promissory Notes by Resolve, which previously purchased non-performing loans from the Bank in 2014. Mr. Aranha further revealed that the Government has agreed to facilitate Resolve retiring up to $107 million of the Promissory Notes in the fiscal year ending 30th June 2018, in accordance with the following schedule: $50 million in August 2017, and $19 million on 30th November 2017, and on each of the two succeeding quarters ending  28th February 2018 and 31st May 2018.

 “The other terms and conditions of the Promissory Notes would have to be agreed between the Bank and the Board of Resolve, which have taken steps to consummate the transaction on or about 10th August 2017.”, Mr. Aranha said.

As for the future of the Bank, Mr. Aranha said the new Board of Directors will reassess the key elements of the Bank’s existing transformation plan with a view to ensuring that the necessary focus is given to critical areas, including credit policies, compliance, cost control and growth.

“From initial reviews, there is a need to engage a more aggressive approach to reducing delinquencies. There is room for improving the collection of non-performing loans  and procedures (and possibly resource adjustments) will be implemented imminently to ensure improvements are realized. Asset realization will be employed more frequently; the provisions established at 30th June 2017 reflect a more aggressive approach in this regard.  Facilities will be restructured where appropriate; serial restructuring will likely be indicative of a situation where restructuring would be inappropriate,” Mr. Aranha said.

Mr. Aranha also stated that focus will be placed on implementing systems and controls, which ensure that compliance with applicable laws, regulations, guidelines and directives takes place as part of day-to-day processes. He further stated that the Board will ensure that regulatory deficiencies are addressed in short order so that management’s time can be devoted to managing the Bank for profit.

While noting that the Bank has shown marginal success in reducing costs, Mr. Aranha said it is clear that its efficiency ratio is below that of its competitors. In this regard, he said focus will be placed on costs control and revenue enhancing opportunities. “Stringent cost control measures will be implemented, consistent with the need to ensure that risks are appropriately managed and customer service is not sacrificed. The Bank will also seek cost recovery from Government in those cases where loss-making operations continue as a social or national service in a Family Island,” Mr. Aranha said.

During the AGM four majority nominated directors and one minority nominated director were elected to the Bank’s Board of Directors.  The new Board includes Wayne Aranha, Chairman, Anthony Allen, Deputy Chairman, Renee Davis, Acting Managing Director, Ruth Bowe-Darville, Kirk Antoni, Director; and the first Director to be nominated by minority shareholders, businessman Timothy Brown.

Photo Caption

BOB Chairman Wayne Aranha addressed the Bank's Annual General Meeting on August 2, 2017.