NCB removed from CariCRIS' rating watch

Published: Friday | December 27, 2013 Comments 0
Patrick Hylton, group managing director, NCB.
Patrick Hylton, group managing director, NCB.

Caribbean Information and Credit Rating Services Ltd (CariCRIS) has removed National Commercial Bank Jamaica (NCB) from rating watch and reaffirmed the rating of jmAA - on its debt issue of US$75 million.

It has also reaffirmed its ratings of CariBBB on the foreign currency and CariBBB+ on the local currency rating on CariCRIS' regional rating scale.

The ratings indicate that the level of creditworthiness of this obligation, adjudged in relation to other obligations in the Caribbean, is adequate, the agency said in a release.

On February 22 this year, CariCRIS placed the Government along with NCB on rating watch until the financing arrangement with the International Monetary Fund was signed, and the full impact of the National Debt Exchange (NDX) and subsequent Private Debt Exchange was ascertained.

"The ratings of NCBJ continue to reflect the company's strong market position in Jamaica, its strong provisioning and relatively good asset quality," CariCRIS said.

"Its high profitability and good diversity in earnings, as well as its good and improving risk-management systems also support the ratings," it added.

"These rating strengths are tempered by the location of its operations in a highly indebted economy with limited fiscal flexibility. The ratings are further tempered by the company's relatively high funding costs, deteriorating operating efficiency and declining capital-adequacy ratio," the CariCRIS released said.

NCB saw its net profit decreased by 14.9 per cent, or J$1.5 billion, to J$8.5 billion for the year ended September 30, 2013. Earnings per stock unit of J$3.47 decreased by 14.9 per cent from J$4.08, while total assets grew by 17.7 per cent, or J$67.1 billion, to J$446.6 billion.

Total stockholders' equity grew by 9.2 per cent, or J$6.1 billion, to J$72.5 billion.

The bank's capital base expanded by J$6 billion to J$72 billion, but return on equity fell more than three points to 12.3 per cent, while its loan book now tops J$141 billion, having grown by J$29 billion in the past year.

NCB is Jamaica's largest commercial bank by assets.


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