The Tribune

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

ROYAL Bank of Canada's (RBC) mortgage lending arm "is still not where we need it to be", the bank's top regional executive has conceded, despite improvements elsewhere in its portfolio.

Rob Johnston, head of RBC Caribbean Banking, said that while the bank has "looked at" removing bad debt from its balance sheet, it has enjoyed success with debt restructuring - except at BISX-listed Finance Corporation of The Bahamas (FINCO).

"Our business clients are enjoying some of the economic activity that is coming back into The Bahamas," he said. "That portfolio for RBC is really strong. Our corporate portfolio is very strong. In fact, we have absolutely no delinquency in our corporate portfolio.

"Our personal banking business in The Bahamas bank is very strong and, again, we are not concerned at all. Where we have not been able to make the same progress is with our clients who are dealing with FINCO. Our mortgage experience is still not where we need it to be, and there are a number of reasons why."

Mr Johnston added: "We are working with the judiciary, the Government and other stakeholders to try and help clients get that part of their stability where they want it to be. People don't want to be worrying whether they are going to lose their home.

"We are not in the business of taking people's homes from them. We want to help people find ways to make ends meet but also honour their obligations. That's that fine balance that we are prepared to, at the individual client level, find the right answer."

Tribune Business reported last month that RBC FINCO reported a 67 per cent year-over-year slump in 2018 first quarter profits. Mr Johnston told Finance Corporation of The Bahamas (FINCO) shareholders at the time that recurring non-performing loan woes were largely responsible for the two-thirds drop in total comprehensive income.

Non-performing loans rose by more than $5m in the three months to end-January 2018 to hit $126m, which Mr Johnston said represented a 6 per cent year-over-year rise and 4 per cent increase on the $120.87m at year-end 2017.

Mr Johnston said RBC has looked at moving bad debt off its books. "We are looking at it. I wouldn't be genuine if I didn't. You have to look at options. To date we haven't made that choice," he said.

"We have found that we have been successful structuring facilities for our individual clients. We have been on occasion required to take possessions of homes, and we have been able to sell them into the market. Selling parts of a portfolio is a viable option and we have looked at it."