In an effort to return to profitability the bank must continue to cut its loan losses and its operational losses. Seems that they are making efforts in this vein to do this. Hopefully they can also get their operational revenue up while keeping a cap on their cost of operations. And then see some profitability. The biggest problem is that while many banks have large volumes of non-performing loans on their books, making new loans is difficult because banks have increased their requirements and so many people cannot meet them as the economy remains lean and almost stagnant. Can Mr. Keith Davis say what happened to the RND shares? Last word was several years ago when they were transferred to Colina Real Estate. Are they filing on time and shouldn't they be in a position of profitability now with all the property leased out?

John, the fact that the regulator and the stock exchange have taken no action against a systemically important financial institution to the Bahamian economy speaks volumes.

By allowing the bank to continue to operate while being under capitalized reduces confidence in the financial system.

The question remains how much of an additional injection does National Insurance need to make into the Bank of the Bahamas to bring their capital ratio's back to the minimum 12%? $10 million? $50 million?

You can't know the exact number because it is a moving target because the bank continues to operate under capitalized which continues to exacerbate the problem as more loans become problematic in the normal course of business.

At the end of the day the Bahamian financial system is negatively effected both actually and perceptually. This reduces the confidence of investors in the Bahamian economy and the Bahamian dollar as the Central Bank and BISX have lost the appearance of independence from the executive. The actions of the current central bank governor will be watched closely by market participants. Keeping in mind the Bahamas is currently at risk of being downgraded by international credit agencies.

I think you know where I'm going with this argument....

I concur with your assessment. The very fact that the Bank of the Bahamas is allowed to operate in violation of the regulator's compliance factors indicates that the Central Bank & regulators are paper tigers that are politically-driven rather than fiscally and monetary-driven. This indicates to the entire world, that the Bahamian banking system is not a level playing field. It indicates a degree of manipulation and obstruction that is contrary to the spirit of all financial and fiduciary responsibilities. In other words it can be expressed as a corrupt Mickey Mouse outfit.

Has RBC resumed the payment of dividends yet?

if your point is, that they should, my point would be that at least RBC is not costing the taxpayer money.

http://tribune242.com/users/photos/2016…

Lol. Not penny stock

The Central Bank has made a judgement call on BoB. Allowing it leverage to reorganize and return to profitability as opposed to tightening the screws and forcing the bank to shut its doors. Wouldn't that lead to even more loss of confidence in the Bahamas government if the bank closes? And what about the loss to National Insurance? Obviously the Central Bank realizes the critical need to keep the bank afloat and so it has given it some degrees of freedom against the backdrop that (1) it is under new management (2) there is s new board of directors and most significantly (3) the bank is showing signs of recovery. My reference to RBC is that it is the largest bank in the country, handling all the government's business but is is still incurring losses, despite significant downsizing. The point is the problems of non profitability is not exclusive to BoB.

John, your information is inaccurate. On a consolidated basis RBC is s well run, profitable and well capitalized Canadian bank with independent directors.

BoB is an undercapitalized, unprofitable, Bahamian government controlled entity. It's Board of Directors are all political appointees.

No independent director will join its board because the first thing they will need to do is close it down and launch a costly forensic audit.

The government, regulator and exchanges strategy is to monitor its operations and "kick the can down the road". This never ends well as banks are intrinsically linked to the broader economy and systemically important. They are treating it like Bamsi, Baha Mar or the Post Office Bank.

Can you confirm RBC's profitability by saying when was the last time they paid dividend. can you also confirm or deny that their share price fell by at least 10% since January 2015. BoB was a bank that valued over $1 billion not too long ago, but yes it was raped and raided by political pirates and cronies. But now the situation of massive hemorraging has been harnessed and there is chance for the bank to recover. The sector of government that is running BoB is not the same one that is monitoring it. In essence your position is that government cannot also operate a successful judicial system because it will be compromised the same way. Don't be misleading by saying my information is inaccurate without substantiating what you say.

Hi John, RBC made C$2.4 billion in its most resent quarterly report. An increase of 4% over last year. Please see the following link:

http://www.rbc.com/newsroom/news/2015/2…

Year to date their share price is down 7% due to the recent stock market turbulence but their dividend is intact. In fact if you read the attached press release you will see that they increased their dividend by 3%.

John you are confusing RBC with FINCO which is a tiny part of this well capitalized global bank. If something happened to FINCO, RBC will be able to back it with their global capital base. The Bahamas government is also backing the BoB with a "commitment letter" but it would surely need to borrow funds to recapitalized the bank if push came to shove.

The difference in parent and capital backing makes a comparison of RBC FINCO and BoB not appropriate and misleading. I am sorry if I have offended you. It is not my intention.

While FINCO may not be paying a dividend and its share price is down they are in compliance with Central Banks capital ratios and they are run with an independent board.

The problem with BoB is its linkages to the wider economy. Government is its largest depositor, its largest shareholder, its largest borrower, it appoints all of its Directors and its management maybe sympathetic to the current administration. Since the government runs its books on a cash basis and not GAAP it is in no hurry to realized possible losses they maybe lurking on the balance sheet of BoB due to its inability to make new loans and aggressively sell off poor performing loans.

In essence BoB is a "zombie" bank similar to BDB. Not exactly alive but far from dead. NIB is loathed to inject further capital as it has ever increasing obligations to the Bahamian public as the economy continues to have lack luster growth.

What the Government should to is to commence and orderly liquidation of the Bank due to its lack of capital, which inhibits it from growth. BoB cannot be turned around without fresh capital. Where will it get the money from to make new loans? The public would be horrified if the BoB said it was making new loans and growing its balance sheet when additional capital is need to meet minimum regulatory capital requirements.

This is the highest level of civilised discourse on this site, with two people with opposing points of views presenting intelligent, reasonable arguments in a civilised fashion.

It gives me hope to see this.

Thanks banker!

**BOB is run b y the government so I have no idea why anyone would be surprised that it is a complete FAILURE. The government of The Bahamas is the biggest single threat to The Bahamas there is, FACT!**

Of course I was referring to RBC - Finco (local) when I was comparing it to BoB. Their shares have fallen to $10.00 but I understand that it went back up to $11.00 in recent weeks. Our biggest problem is that we don't support things Bahamian and we have been brainwashed to believe that once something is run by the government it is doomed to fail. We must remember that each and every Bahamian is a shareholder of BoB and the welfare of National Insurance is somewhat vested in the success of BoB. Likewise we, the people, are the power of the government. When we sit back and accept mediocre, then we will get a lousy, corrupt and incompetent government. When we hold them to account there will be transparency accountability and successful governance. Had President Obama not had faith and confidence in America and bailed out the auto industry, that industry would have been mothballed by now and the windows dark. Additional thousands of Americans would have been without work. But not only has Americas auto industry made a dramatic and highly profitable recovery, but this industry will set new records of success and profitability if consumer confidence can be restored and they are convinced that $154.00 oil is a thing of the past. The big profits are in full size and luxury vehicles. Likewise BoB should be given a chance to recover and not be written off as long as there is light at the end of the tunnel and is appears to be accessible.

I applaud your optimism John, but from where I sit, all that I see is an inevitable downward spiral of Bahamian institutions and the Bahamian economy. I do not believe that the public or the shareholders have the full story and the full picture of BoB, and its true situation.

I have no trouble with the government saying that BoB has to be propped up, and it is essential to the Bahamian economy to keep it alive.

However, to do that, the government must have the transparency and full disclosure, informing us the shareholders and the country that that is the course of action, and that fiduciary benchmarks are being ignored in an attempt to save it.

The government has not communicated that directly, and as a result, it portrays the regulators and the Central Bank as in best case, toothless paper tigers and in the worst case, corrupt and not independent of the political process. This sends a strong message to the outside world (for example Moody ratings, OECD, EU, WTO etc) that our house is not in order and the playing field is not level.

I just wish that the government applied the same financial rigor to BoB as they did to Sarkis Izmirlian.

Mr Perry Christie is rumoured to have told Mr Peter Turnquest in no uncertain terms that if he does not back-off on Mr. Christie's relationship with Mr Ruffin, then Mr Christie will make known to the Bahamian public all of those FNM politicians and their FNM political friends and business cronies who have received unsecured (or improperly secured) advances and loans from the Bank of The Bahamas (BoB) that have been defaulted on and may never be repaid. In the circumstances, Mr Turnquest is likely to cower and not press the Ruffin delinquent tax matter with any great political fervor. This is also the reason why the FNM have backed away from seeking any political mileage out of the whole BoB debacle!