Bahamas must break $2bn logjam in its banking sector

The Bahamas must break the $2bn-plus logjam in its commercial banking sector if it wishes to defeat a key “drag” which may undermine its post-COVID recovery, a top investment banker warned yesterday.

Michael Anderson, president at RF Holdings, told Tribune Business The Bahamas will only successfully grow its way out of post-pandemic stagnation and soaring debt if it mobilizes the sizeable volume of surplus liquidity which currently clogs the nation’s banking system.

Speaking at the unveiling of RF Holdings’ seventh annual Bahamas Economic Outlook conference, scheduled for May 6, Anderson said this potential capital pool – which added up to $2.158bn as at February 2021 – must be applied to capital investments in businesses and industries that have the potential to help the nation revive job creation and economic activity.

“One of the drags is the lack of investment,” Anderson further commented.

“One of the drags is the lack of investment,” Anderson further commented. “If there’s $2bn sitting in the banks doing nothing, we’ve got a long way to go. We’ve got to move it out. Banks have traditionally been seen as the source of capital, and they’re not now. We’ve got to invest in the economy; the only way it is going to grow is if we put in investment, both local and foreign.”

As the Government’s fiscal bleeding threatens to “drag” down the pace of the nation’s post-COVID recovery, the inability to access excess assets sitting in the banks – which supposedly should be available for investment purposes – means local entrepreneurs cannot leverage on the opportunities that a post-COVID world presents for economic growth.