The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Bank of the Bahamas International is exploring the consolidation of key back office functions at the former John S George head office in Palmdale, its managing director told Tribune Business yesterday.

Paul McWeeney said the BISX-listed institution, which took possession of the property after the now-defunct retailer defaulted on a multi-million dollar loan, was aiming to cut rental costs via a move that would effectively combine four locations into one.

Indicating that Bank of the Bahamas International also wanted to cut lease/rental costs, Mr McWeeney said it would also likely open “a small retail unit” at the same site to serve customers.

“We rent a lot of space,” Mr McWeeney told Tribune Business. “The plan is, with the John S George building we acquired, to maybe look at putting some back office functions in there.

“We have head office spread out at four different locations, so we would consolidate the non-business type units. The main focus is to allow us to capitalise on consolidating back office operations.”

Such a move would also place Bank of the Bahamas International at the heart of a commercial banking hub, given the proximity of Royal Bank of Canada (RBC), Scotiabank (Bahamas) and CIBC FirstCaribbean International Bank (Bahamas) branches in the immediate vicinity.

The BISX-listed bank’s loan, which was originally made to finance John S George’s acquisition by Ken Hutton’s ill-fated buyout group, was secured on the Palmdale-based real estate. With the retailer’s demise, the bank has merely moved to collect on its security, and is now moving to put the property to good use.

Mr McWeeney, meanwhile, also revealed that Bank of the Bahamas International had received “a lot of interest in joint ventures” for the West Bay Street property it acquired some years ago as a future headquarters building.

But the offers, relating to the site between the Nassau Palm resort and the Manx Corporate Centre, have all been rejected. “Right now, we’re going to focus on the balance sheet for the moment,” Mr McWeeney said.

He added that the bank had no plans for further branch or physical presence expansion, given the state of the economy, and was concentrating on its electronic banking plans.

Mr McWeeney said the bank’s recently-launched e-notifier product had gained ‘a lot of traction”, helping customers both manage their accounts and financial affairs, plus act as a safeguard against fraud and theft.

“One of the things doing well for us is the wireless merchant terminals. Instead of having a fixed-line attached to the terminal, these are wireless,” Mr McWeeney added.

Introduced late last year, he added that these terminals had proven useful for restaurants, taxi drivers and straw vendors. They had also proven popular with security-conscious customers, as cards were swiped in full view, not behind the counter.

“We’re seeing some potential uptick on the prepaid cards, with some large clients. That’s showing significant promise,” Mr McWeeney told Tribune Business.

When it came to growth in its traditional loan book, he added that Bank of the Bahamas International was focusing on retail clients but being “very selective”.

“We’re doing a lot internally to better align infrastructure to match costs,” Mr McWeeney said. “We’re building capacity on the retail, electronic infrastructure, and are poised to take on much larger clients.”

He added that the bank was also focused on maintaining adequate capital levels, and its current 21 per cent risk-rated capital ratio was well ahead of the Central Bank of the Bahamas’ 20-21 per cent guidelines.