Nassau, Bahamas - Commonwealth Bank’s preference shareholders demonstrated the ultimate in confidence in the bank recently, converting more than $32.7 million of the $34.9 million of preference shares replacing the old classes of preference shares previously held.

The preference share redemption was part of an exercise to comply with the Basel III international agreement. Basel III is a comprehensive set of reform measures developed by the Basel Committee on Banking Supervision to strengthen the regulation, supervision and risk management of the banking sector.

According to Commonwealth Bank President Ian Jennings, the October 1 redemption and conversion served the purpose of meeting regulatory requirements while demonstrating shareholders’ confidence in the bank.

“Out of the total $34,985,000 Preference Shares redeemed, $32,714,000 was re-invested in the Bank,” said Jennings. “These results are consistent with the Bank's expectations and confirm the confidence that investors continue to have in the ongoing success of their Bank.”

The shares redeemed were those in Classes A, B, C, and D, with shareholders taking up E class preference shares.E class shares are qualified as regulatory capital under Basel standards.

“This exercise was the final step taken by the Bank to ensure all of its $81,608,000 preference shares qualify as regulatory capital,” explained Jennings. In 2010, before the exercise started to meet BASEL III compliance, the bank’s preference shareholders held $85 million in preference shares. The Central Bank of The Bahamas adopted the BASEL III convention that established new regulatory capital standards with a phased implementation to eliminate certain types of preference shares from inclusion in regulatory capital over a ten year period.

The bank’s more than 6,000 common shareholders, approved the proactive plan to convert all the preference shares that did not meet the new requirements into compliant classes over a two year period, well ahead of the 10 years allowed.

It was at the last AGM in May of this year, attended by hundreds of shareholders representing a broad cross section of the Bahamian population, that the final redemption and conversion of preference shares was approved.

“We are very pleased to advise that Commonwealth Bank has now complied with the new regulations and standards of Basel III for our Preference Shares and we thank all preference shareholders who elected to maintain their relationship with the Bank,” said Jennings. “We want to take this opportunity to reiterate our commitment to the financial success of the bank and consequently all of our loyal shareholders.”

Commonwealth Bank is the largest Bahamian Bank and one of the largest Bahamian owned companies listed on BISX. With more than $1.4 billion in assets, the Bank is a market leader in service and convenience, operating eleven branches in New Providence, Abaco and Grand Bahama and employs over 550 staff.