The Tribune

By Neil Hartnell

Tribune Business Editor

nhartnell@tribunemedia.net

A BISX-listed bank was last night said to have placed “all hands on deck” in a bid to recover lost ground and match 2024’s full-year profitability, with its top executive asserting: “We will certainly not be accepting less than $18m graciously.”

Gowon Bowe, Fidelity Bank (Bahamas) chief executive, told Tribune Business the commercial lender is seeking to catch up by maximising the opportunities presented by merchant demand and higher consumer spending in the Christmas run-up after net income for the nine months to end-September 2025 declined by just over 10 percent year-over-year.

Despite “all the revenue targets being achieved”, with fee and commission income ahead of 2024 comparatives by “almost 20 percent” for the first three quarters, the BISX-listed bank’s $1m-plus growth in total income failed to keep pace with increased payroll and general and administrative expenses.

Total expenses for the nine months to end-September were some $2.5m or 7.3 percent ahead of 2024, standing at $36.701m compared to $34.202m in the prior year, and Mr Bowe told this newspaper that “it cannot be business as usual relative to value proposition and money spent”.

He added that Fidelity Bank (Bahamas) has to examine “how best to get value out of expenditure”, and its investments in extra staff and systems in a bid to generate “new lines of business” that are designed to lead to greater profitability and sustainable shareholder returns.

Asserting that “none of the expenditure has been wasteful; it’s all been purposeful, Mr Bowe acknowledged that - while there was likely to be “some concern” among investors over the nine-month performance - these should be “allayed” by the fact there were no one-off or “irregular” drivers of the 2025 year-to-date results.

And he asserted that the near-$13m profits for the nine months to end-September 2025 are still more than sufficient to meet, and pay out, the dividends expected by shareholders without impacting the bank’s capital base and regulatory requirements set by the Central Bank.

Speaking after profits for the year’s first three quarters dropped by around $1.434m, from $14.158m during the same period in 2024 to $12.724m, Mr Bowe said of the bottom-line goals: “Our first upside for the year was to hit the same $18m last year and then move to $20m.

“What we found in the third quarter were that all the positive elements… all the revenue targets were being achieved. We saw the actual fees and commissions, with the growth of value-added services - merchants services and cards - that increased almost 20 percent year-over-year for the first nine months.

“Then we also saw the stabilisation of net interest income because we replaced some of the loan interest income with investment interest income, although that’s not where we want to be long-term.” Fidelity Bank (Bahamas) net loan book declined by almost $9m during the nine months to end-September 2025, narrowing from $358.01m at year-end 2024 to $349.121m.

However, during the same period, its holdings of investment securities increased by close to $34.8m, rising by 22.7 percent from $153.441m to $188.221m. These changes had minimal top-line impact as, for the nine months to end-September 2025, Fidelity Bank (Bahamas) gross interest and net interest income were down by less than $1m each against prior year comparisons.

However, fee and commission income grew by almost $1.5m, or 19.3 percent, year-over-year to hit $9.182m - as opposed to $7.697m in the prior year - for the nine months to end-September 2025. As a result, the BISX-listed lender’s total income grew by just over $1m for the period to $49.42m.

However, this was insufficient to offset the $1.1m and near-$1.8m year-over-year increases in general and administrative, and salaries and benefits, costs for the first three quarters in 2025. The former expense category hit $18.632m, representing a 6.3 percent increase, while employee compensation jumped by 16.2 percent to $12.878m.

“The greatest challenge we ran into was on the expense side,” Mr Bowe told Tribune Business. “We know where the additional expenditure is coming from. Some of those elements have not turned into revenue producers.

“We’ve seen payroll increase, but it’s a little bit of a chicken and egg there as first you have to have appropriate personnel to run those lines of business and take on some of the costs ahead of revenue, but we believe that will set us up for the future in terms of sustainability.”

As for the rise in general and administrative expenses, the Fidelity Bank (Bahamas) chief suggested the bank was eyeing a different approach. Attributing the increase to system upgrades and modifications, he added: “These are more project costs. We refer to them as non-recurring, but every year we have new projects. We are looking at spending on systems to avoid projects.

“When we look at what we saw for the first nine months, it’s about controlling costs with a viewpoint not to be penny wise and pound foolish. We believe none of the expenditure was wasteful; it’s all been purposeful, but we have to look at how best to get value out of expenditure and hold people accountable - employees, service providers and system providers.

“It can’t be business as usual relative to the value proposition and money spent.” Fidelity Bank (Bahamas) is thus seeking to extract value and returns from the investments it is making far more quickly than in recent months and years.

“I know there will be some level of concern with profitability for the first nine months,” Mr Bowe conceded. “I allay that by saying that when you look at consistency or sustainability in profitability, we are not having one-off or irregular contributions driving profitability. Sometimes you run into situations where you have increased costs before you get revenue.

“To get to $20m will require a super quarter [four]. There are some things in the pipeline that can achieve that. There are some very large merchants and holiday spending, but that’s more for the long-term. There will be some upside in the fourth quarter as the focus is on making up the stagger we lost in the third quarter and achieving consistent profitability with the prior year.

“We will certainly not be accepting less than $18m graciously. All hands are on deck to make sure that all the levers showing positive signs of impacting the performance of the bank in terms of revenue generation that we are maximising those opportunities in the fourth quarter, which is the biggest period for consumer spending,” Mr Bowe added,

“It’s having that opportunity with a view to maintaining consistent profitability and the sustainability of future profitability. We are investing - there’s nothing untoward, nothing exciting on the expenditure side to say there’s radical, unplanned expenditure. Revenue pace has not picked up at the pace of expenditure, and you incur costs upfront that you earn back over a period of time.”

Fidelity Bank (Bahamas) will have to generate a near-$5.3m fourth quarter profit for full-year net income to match 2024’s. The bank generated just $3.813m in net income during last year’s final three months, while 2025 third quarter profits this year stood at $3.511m.

Still, Mr Bowe argued that “everything is trending in that direction” to match 2025’s $18m full-year profit. He added: “From a shareholder perspective, we have managed our capital to put us in a position to distribute dividends consistent with the expectations of shareholder without causing harm to our capital position. The present profit of $13m is consistent with giving returns back to our shareholders that are actually meaningful.”