Benchmark (Bahamas) chief executive said the ‘comfort letter’ it provided last year to its Alliance Insurance Management subsidiary to affirm it was a going concern was not “a cause for worry”, as the BISX-listed investment manager unveiled a $2.5 million net loss for 2011.
Julian Brown, who is also Benchmark’s president, described 2011 as the worst year since the 2008 global crash for the company’s investment portfolio, which incurred a $1.957 million fall in the ‘unrealised’ value of the securities it held – the main driver of Benchmark’s net loss.
The company’s 2011 financial statements, which have been obtained by Tribune Business, disclose several items that should be of concern to Benchmark’s Bahamian shareholders, namely the ‘comfort letter’ the company was required to provide to its wholly-owned international broker/dealer subsidiary, Alliance.
The letter was required to confirm that Alliance will be able to continue as a ‘going concern’ due to financial support it will receive from its Benchmark parent, something Mr Brown confirmed when contacted by Tribune Business last night.
Benchmark’s 2011 financial statements said: “The company [Benchmark] issued a letter of comfort during the year 2011 to Alliance, confirming its commitment to ensuring that the subsidiary is funded for the foreseeable future.”
Effectively, this is an admission that Alliance – in its current state – will be unable to continue as a going concern without financial support from the parent, having itself suffered a $2.236 million net loss for 2011. That figure is 89.4 per cent of Benchmark’s total losses for 2011.
Mr Brown, though, said the situation was no reason for shareholders to panic. “When things recover, Alliance’s portfolio will recover as well,” he told Tribune Business. “I don’t think it’s a cause for concern at this point in time.”
Addressing Benchmark’s shareholders, Mr Brown said the company was dependent on economic recovery for its own rebound.
“The worst of the storm, I think, is behind us,” he told Tribune Business. “Benchmark is part of the global financial system, and we’re not performing worse than any other institution of the same calibre. We’re working aggressively to ensure that once things recover, we’ll recover as well.
Neil Hartnell, The Tribune
