Finco Non-Accruals Strike 11.84% Mark

By NEIL HARTNELL Tribune Business Editor FINANCE Corporation of the Bahamas (FINCO) saw its non-performing loans increase by less than 1 per cent or $519,000 during the first quarter of its 2012 financial year, hitting 11.84 per cent of its total loan portfolio. Confirming that FINCO was continuing its policy of not paying dividends to shareholders until the wider Bahamian economy improved, Tanya McCartney, in response to Tribune Business's questions, said non-performing loans now stood at a total value of $100.6 million. She added: "Non-accrual loans (NALs) increased by less than 1 per cent or $519,00o0 from the 2011 fourth quarter to the 2012 first quarter. Non-performing loans represent 11.84 per cent of the total loan portfolio." Nevertheless, FINCO enjoyed a 2012 first quarter net income of almost $9 million, moving from a $1.813 million loss in the 2011 comparative to $7.194 million this time around. Apart from increased net interest income, driven by what Ms McCartney described as the "release of the time-value provisions into interest income in accordance with International Accounting Standards", and reduced interest expenses associated with system liquidity and the Prime rate cut, FINCO was also boosted by the drop in loan loss impairments. These fell from $6.652 million in the 2011 first quarter to just $1.018 million this time around, a performance that will not necessarily be repeated throughout the current financial year. Ms McCartney said last night: "This is unlikely to continue as the economy has not yet recovered and the high level unemployment is expected to continue throughout the year." Tribune Business reported last month that a $5.4 million boost from changes to its loan loss provisioning calculation enabled FINCO to enjoy a 3.18 per cent net income increase for its 2011 financial year, offsetting an impaired credit portfolio that breached the $100 million mark.


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