FINCO net profit down more than 50 percent
Guardian Business Reporter
Published: Feb 17, 2017
Net profit for the Finance Corporation of Bahamas Limited (FINCO) decreased by more than 50 percent for the year ending October 31, 2016.
Chairman of FINCO Robert Johnson revealed the information in his review of the company’s unaudited results for the period.
FINCO, which has the responsibility of dealing with Royal Bank of Canada’s (RBC) mortgages, stated that at the end of the period, net profit stood at $11.6 million and represents a decrease of 54.7 percent when compared to the corresponding period for 2015.
The bank attributed the significant decline in net profit to a highly competitive market, increased provisions and higher operating costs.
Johnson admitted that the bank was challenged with finding new credit and faced an increase in its non-performing loans by 15.5 percent.
He pointed out a significant amount of the increase in non-performing loans occurred during the fourth quarter of 2016 and is attributed to Hurricane Matthew.
“The other contributing factors were the aging of the non-performing portfolio beyond five years attracting an additional provision, and adjustments to the general provision made to recognize the continued weak economic performance and high unemployment in the country,” the chairman said.
“The bank’s capital ratio continues to be strong and above the regulatory requirements at 34.1 percent and is comprised mainly of Tier 1 capital.”