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WEDNESDAY, JULY 26, 2023
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Insurers fear ‘hardship’ over 35% blacklist capacity threat t 8BSO #BIBNBT IBT POF TIPU UP FTDBQF &6 MJTU t 0UIFSXJTF (FSNBO SFJOTVSFST DPVME XJUIESBX t /FX CVTJOFTT IBMU GVSUIFS IJLF JO SFDPSE QSJDFT
By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net BAHAMIAN insurers yesterday warned they, and thousands of businesses and homeowners, will face “tremendous economic hardship” if 35 percent of reinsurance capacity is lost by The Bahamas failing to escape Europe’s tax blacklist. Major property and casualty underwriters told Tribune Business that The Bahamas is running
out of time to exit the European Union’s (EU) non-cooperative list, and in effect has only one shot at achieving such an outcome through this October’s review, if it is to secure continued German reinsurance support that is “critical” to maintaining coverage for key real estate, auto and other assets. Anton Saunders, RoyalStar Assurance’s managing director, explained that reinsurers such as Munich Re will be prevented by German law from receiving
tax relief or deductions on hurricane-related claims payouts to The Bahamas if this country still remains on the 27-nation EU’s blacklist after the October review. Given that such payouts will likely be worth hundreds of millions of dollars if a Dorianstrength storm strikes a major Bahamian island, he added that the loss of such tax relief might deter German reinsurers from continuing to support local carriers such as RoyalStar
Albany developer charged on ‘brazen insider trading’ By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net THE Bahamas-based billionaire who spearheaded Albany’s development was yesterday charged with orchestrating a “brazen insider trading scheme” that allegedly netted millions of dollars in illicit profits for his closest associates. Joe Lewis, the Briton who has been a Bahamas resident since 1979, is accused by New York federal prosecutors of tipping lovers, secretaries, friends and even his private pilots to purchase various corporate stocks using non-public information he accessed in his role as a major global investor. The 86 year-old’s attorneys last night blasted what they branded an “egregious error” by the southern New York district
t "UUPSOFZT GPS CJMMJPOBJSF +PF -FXJT CMBTU AFHSFHJPVT FSSPS attorney’s office in electing to charge Mr Lewis with 16 separate counts of securities fraud and three counts of conspiracy. David Zornow, of the Skadden Arps law firm, said in an e-mailed statement to the media: “The [US] government has made an egregious error in judgment in charging Mr Lewis, an 86-year-old man of impeccable integrity and prodigious accomplishment. Mr Lewis has come to the US voluntarily to answer these ill-conceived
collapsed last November. Mr Bankman-Fried and his closest associates lived and worked in multiple residences at Albany during their Bahamian stay, including the development’s flagship Orchid penthouse. There is no link between the two cases. However,
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Payroll errors costing taxpayers near $120m By FAY SIMMONS Tribune Business Writer jsimmons@tribunemedia.net SALARY and payroll errors are costing Bahamian taxpayers around $120m per year, the Government’s top finance official disclosed yesterday, as he blamed the wastage on too many systems that are not linked to each other. Simon Wilson, the financial secretary, speaking to government employees at the Oracle ERP (enterprise resource planning) system training and professional development workshop, said the public sector payroll is estimated to have a 10 percent error rate. With public service pay and benefits accounting for about 60 percent of the Government’s budget, he added this translated
SIMON WILSON into a near-$120m annual loss. “Well, our payroll accounts for 60 percent of the Government’s Budget. And if we have an error rate of 10 percent, that’s roughly $120m. That’s why it’s important. Those small errors…overpayments or underpayments and so forth. If you minimise
those errors, you can have tremendous savings,” Mr Wilson said. Further errors occurred when persons who have died, or have left the public service, continue to receive a salary from the taxpayers. Mr Wilson explained that the problems stem from having separate systems for payroll, general
ledger, budget and final accounts, thus making it difficult and time consuming to move information across platforms. “There is no one central application, so moving information between the various applications is time consuming, increases the workload of the officers within those applications themselves,” he added. “Basic functions are very manual and not properly understood. “So, for example, we do salary reassessments, back pay. As is, it’s very, very manual. Repairing for pension payments, that is very, very manual. We can’t flip the switch and say: ‘This is what is owed’... There’s no tie-in to our revenue systems. So you still have posted manually revenue receipts. All these things take time, and
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‘Quality new credit’ hard to find with $127m drop By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net FIDELITY Bank (Bahamas) says the more than $127m collective decline in outstanding mortgage and consumer loans during 2022 shows “quality new credit” and borrowers will be tough to find despite the economy’s rebound. The BISX-listed bank, in its just-released report ahead of tonight’s 2022 annual general meeting (AGM), said it is aiming to increase non-interest
earnings from 10.64 percent to 20 percent of total income in a bid to counter the decline in traditional loan-related income sources that Bahamian commercial banks have relied upon to drive profitability and growth. “Statistics from the Central Bank of The Bahamas report that consumer loans and mortgage loans outstanding with commercial banks as of December 31, 2022, decreased by $89m and $38.1m compared with December 31, 2021, which demonstrates that the
availability of quality new credit is limited even as the economy of The Bahamas experiences its rebound,” Fidelity Bank (Bahamas) warned shareholders. “Since the peak of the global pandemic, when furloughs and unemployment, particularly in the tourism sector, led to significant increases in the number of loans and advances to customers that fell into delinquency, the yeoman’s effort by the bank during the past two years led to the rehabilitation of a
by underwriting the bulk of this nation’s risks. Such a scenario, if it happens, would occur at the worst-possible time given that reinsurance capacity and willingness to underwrite risks in the disaster-prone Caribbean is at a near 30-year low. Insurance Company of The Bahamas (ICB), in its just released 2022 annual report, said the drop in reinsurance availability has already pushed property insurance costs for Bahamian homeowners and businesses to the highest levels it has seen in its 26-year history. And premium prices would be sent skyrocketing even further if Bahamian insurers lose German reinsurance support through this nation failing to exit the EU’s blacklist. Timothy Ingraham, Summit Insurance Company’s managing director, told this newspaper that the loss of such backing would likely force
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Retail savings bond in ‘final approval stages’ t (PWFSOPS 8JMM GPTUFS ATBWJOHT DVMUVSF BGUFS MBUF A MBVODI t A$PNQFUJUJWF (PW U CPOE PGGFSJOHT UP CPPTU AUSBOTQBSFODZ t 0DUPCFS NPWF UP FNQPXFS NBSLFU BOE ACVJME DPOmEFODF
JOE LEWIS charges, and we will defend him vigorously in court.” The case against Mr Lewis is being brought by Damian Williams, the US attorney for the southern New York district, who is also leading the prosecution of Sam Bankman-Fried, founder of the Bahamas-headquartered multi-billion FTX crypto exchange that
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significant number of such delinquent loans. “However, certain such loans remain as of yearend and, when combined with the contraction in the primary interest earning assets of the Bank, loans and advances to customers, particularly in the consumer loan portfolio that yields higher interest margins, resulted in a decreased interest income,” bank management added. “This was offset by the decrease in interest
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By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net THE CENTRAL Bank is “committed” to launching a product designed to foster a greater “savings culture” among Bahamians before year-end 2023, its governor affirmed yesterday, with approvals “in the final stages”. John Rolle, in e-mailed replies to Tribune Business questions, said the regulator is aiming to rollout the “savings bond” to small retail investors by the calendar year’s final quarter with the initiative also intended to broaden the base of government securities purchasers. And, in further local debt market reforms, he added that the October 2023 launch of “competitive bidding” for government bonds, known as Bahamas Registered Stock (BRS), will enable the market rather than the Central Bank or the Government - to price the latter’s issues in a “more transparent” manner that will ultimately
JOHN ROLLE lead to the development of a local yield curve. Speaking out after the Government, in its recently-released annual borrowing plan, said the long-awaited savings bond will launch in the 2023 third quarter to boost capital markets participation by small investors, Mr Rolle confirmed this timeline and said the product is in “the final stages of approvals”. “The broad framework has been developed with technical assistance from international consultants who specialise in this area,
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