After seeing growth in net income during the first quarter, Bank of The Bahamas (BOB) saw a more than five percent decline in operating income during the second quarter.
In the bank’s unaudited financial statement for the period ending December 30, 2020, BOB Managing Director Kenrick Braithwaite attributed this drop to lower net non-interest income as a result of the COVID-19 pandemic.
Net income stood at $0.06 million at the end of the quarter.
“Comparing the current period ended December 31, 2020 to the prior period ended December 31, 2019, the bank’s total operating income decreased by $0.7 million or 5.64 percent for the current quarter and $0.7 million or 3.28 percent for the current fiscal year to date, due to lower net non-interest income, partially offset by higher net interest income,” he said.
“The impact of the pandemic was immediately felt by the bank on its non-interest income, resulting in an overall decline of $0.9 million and $1.2 million for the current quarter and year to date, respectively. The positive variance in net interest income of $0.3 million and $0.5 million were attributable to lower interest expense, owing to a decline in certain deposit balances and interest rates.”
Despite its growth challenges, Brathwaite said BOB remains committed to achieving sustainable profitability.
However, he said the journey toward that end has not been easy, particularly as operating expenses climbed nearly 20 percent during the quarter.
“The bank’s operating expenses increased by $1.4 million or 18.52 percent for the current quarter and $2.1 million or 14.25 percent year to date, as higher bank license fees of $0.6 million was recorded by the bank due to the increase in levy imposed by the Central Bank. Increases were also noted in staff costs, depreciation and IT-related expenses, as the bank invested in the human resources, system innovation and upgrades to support the bank’s planned growth and strategic initiatives,” he said.
“Net credit loss expenses of $4.4 million were recorded year to date compared to $5.1 million of net credit loss expenses during the same period of the prior fiscal year – a 13.35 percent positive variance. The bank continues to maintain a strong financial position with total assets of $936 million and the composite of loans and advances, net of $379.4 million as at December 31, 2020. Total equity closed at $154.6 million.”
Brathwaite said bank liquidity remained strong in the second quarter, with cash and cash equivalents at $274.9 million.