CariCRIS reaffirms ‘good creditworthiness’ ratings for NCB (Cayman) Limited
Category: Ratings Rationale
NCB (Cayman) Limited
NCB Capital Markets Limited
RATING ACTION:
On November 14, 2023, CariCRIS upgraded the assigned Issuer/ Corporate Ratings to CariA (Local Currency Rating) on the regional scale and reaffirmed jmAA- (Local Currency Rating) on the Jamaica national scale to NCB Capital Markets Limited (NCBCML or the Company). A stable outlook was maintained.
RATING SENSITIVITY FACTORS:
Factors that could, individually or collectively, lead to an improvement of the ratings and/ or Outlook include:
- Improving profitability by 10% or more for 2 consecutive periods as a result of higher income earned from its asset management and investment banking segments
- Improvement in 1-year Liquidity Gap ratio to 35% or better for two consecutive years
- Improvement in the GoJ’s credit rating leading to an improved credit risk profile of NCBJ
- Growth in TNW by 15% or more for 2 consecutive financial periods
Factors that could, individually or collectively, lead to a lowering of the ratings and/ or Outlook include:
- Worsening of NCBCML’s short-term J$ liquidity measures over a 24-month period
- A downgrade in the GoJ’s credit rating leading to a deteriorated credit risk profile of NCBJ
- A reduction in NCBCML’s capital adequacy ratio to below the Systematically Important Financial Institution (SIFI) regulatory minimum of 14%
- A Reduction in PAT by 15% or more for 2 consecutive financial periods
- A contraction in TNW by 17.5% or more for 2 consecutive financial periods
Analysts’ Contact Info:
Keith Hamlet
Mobile : 1-868-487-8356
Maxwell Gooding
NCB Merchant Bank (Trinidad and Tobago) Limited
RATING ACTION:
On November 14, 2023, CariCRIS reaffirmed the assigned Issuer/ Corporate Ratings of CariA (Local and Foreign Currency Rating) on the regional scale and ttA (Local Currency Rating) on the Trinidad and Tobago national scale to NCB Merchant Bank (Trinidad and Tobago) Limited (NCB Merchant or the Company). A stable outlook was maintained.
RATING SENSITIVITY FACTORS:
Factors that could, individually or collectively, lead to an improvement of the ratings and/ or Outlook include:
- The successful rollout of the Company’s income rebalancing strategy leading to a greater contribution to total income from its Retail and Business Banking Division to over 40%
- A reduction in the reliance on institutional funding to under 50%
- Sustained increase in profitability of 15% or more for 2 consecutive financial years
- A reduction in the exposure to the Government in the loan portfolio to 60%
Factors that could, individually or collectively, lead to a lowering of the ratings and/ or Outlook include:
- Net interest spread compression leading to a reduction in profit after tax (PAT) by greater than 15% sustained for 2 financial years
- A systematic increase in liquidity pressures in the environment, leading to funding withdrawals in excess of 50% from large institutional investors, and a worsening of short-term TT$ liquidity measures over an 18-month period
- Deterioration in the Parent’s (NCB Capital Markets Limited or NCBCML) credit rating that could materially impact the extent of credit support available to NCB Merchant
Analysts’ Contact Info:
Keith Hamlet
Mobile : 1-868-487-8356
Maxwell Gooding
NCB Merchant Bank (Trinidad and Tobago) Limited
CariCRIS reaffirms overall ‘good creditworthiness’ ratings for NCB Merchant Bank (Trinidad and Tobago) Limited
NCB Capital Markets (Barbados) Limited
RATING ACTION:
On November 14, 2023, CariCRIS upgraded the Issuer/Corporate Credit ratings assigned to NCB Capital Markets (Barbados) Limited (NCB Barbados, NCBCMBL or the Company) by 1 notch to CariBBB+ (Foreign and Local Currency Ratings) on its regional rating scale. A stable outlook was assigned.
RATING SENSITIVITY FACTORS:
Factors that could, individually or collectively, lead to an improvement in the ratings and/or outlook include:
- Improvements in the credit risk profiles of the Government of Jamaica and/or the Government of Barbados
- Improvement in profitability over the next 12 to 15 months supported by earnings from the Eastern Caribbean region
- Successful roll-out of new services leading to further diversity in income-earning capability
- An improvement in the TNW to total assets ratio to 18%
Factors that could, individually or collectively, lead to a lowering of the ratings and/or outlook include:
- Significant deterioration in the credit risk profiles of the Government of Jamaica and/or the Government of Barbados
- Deterioration in ROEA to below 1% sustained for 2 financial years
- Deterioration in ROE to below 15% sustained for 2 financial years
- Deterioration in the TNW to total assets ratio to below 10%
- Deterioration in the ratio of total earning assets to interest-bearing liabilities to below 1 time
Analysts’ Contact Info:
Keith Hamlet
Mobile: 1-868-487-8356
Megan Dass
Mobile: 1-868-487-8356
NCB (Cayman) Limited
RATING ACTION:
On November 14, 2023, CariCRIS reaffirmed the assigned rating of CariA (Foreign and Local Currency Ratings) on the regional rating scale for NCB (Cayman) Limited. A stable outlook was assigned.
RATING SENSITIVITY FACTORS:
Factors that could, individually or collectively, lead to an improvement in the ratings and /or outlook include:
- Improved profitability over the next year as a result of higher income earned from investments and/or loans, thereby contributing to Net Profit (NP) growth of 15% or more
- A reduction in the Non-Performing Loans (NPLs) ratio to below 5%
- Increase in TNW by 15% or more for 3 consecutive years
Factors that could, individually or collectively, lead to a lowering of the ratings/or outlook include:
- A decline in investment yield leading to a contraction in the net interest rate spread to below 1% over the next 12 to 15 months
- NPLs to Gross Loans ratio of above 25% sustained for the next 12 months
- Deterioration in the credit rating of National Commercial Bank Jamaica Limited (NCBJ or the Parent of NCBKY) that could materially impact the extent of support available to NCBKY
Analysts’ Contact Info:
Keith Hamlet
Mobile : 1-868-487-4356
Sultan Mohammed
Mobile : 1-1868-362-7304
Linstant Properties Limited (Linstant)
Linstant Properties graded ‘Excellent’
Caribbean Information and Credit Rating Services Limited (CariCRIS) has assigned the grading of SME 1 (Excellent) to Linstant Properties Limited (Linstant). The grading indicates that Linstant displays excellent business and financial performance and has excellent prospects for sustaining this performance.
The grading is driven by the following strengths: (1) the Company possesses a niche competitive monopoly position which gives it significant pricing power, (2) Linstant has developed several competitive advantages, (3) the Company displays strong management capabilities, (4) there are several operating efficiencies which help to control costs, and (5) robust growth is anticipated to be sustained in the medium-term. The grading strengths are tempered by the following factors: (1) high gearing, though consistent with the firm’s business model, (2) low barriers to entry for the industry; however, niche segmentation can provide sufficient protection, and (3) future prospects can benefit from a documented business plan.
Factors to monitor:
- High leveraging
- Cash flow management
- Regional expansion plan execution.
Linstant is the owner and operator of the brand “Rent 2 Own Auto”. The Company’s core activity is the rental/sale of used cars via leasing or hire purchase agreements.
CariCRIS’ SME Gradings are offered to small and medium-sized businesses seeking to raising debt financing from financial institutions and/or the capital market. It provides an independent opinion on the creditworthiness of SMEs and their ability to service and repay current and proposed debt facilities.
For more information on Linstant Properties Limited’s grading, please visit www.caricris.com or contact:
| Stefan Fortuné | Candace Williams | |
| Snr Mgr – Ratings, Research & Training | OR | Asst Mgr – Technical Services, Research & Training |
| Phone: 1-868-799-6751 (m) | Phone: 1-868-713-6973 (m) | |
| E-mail: sfortune@caricris.com | E-mail: cwilliams@caricris.com |
Note
This press release is transmitted to you for the sole purpose of dissemination through your agency/newspaper/magazine. You may use this press release in full or in part without changing the meaning or context thereof, but with due credit to CariCRIS. CariCRIS has the sole right of distribution of its press releases, for consideration or otherwise, through any media, including websites, portals, etc.
Access Financial Services Limited (AFS)
RATING ACTION:
On November 9, 2023, CariCRIS reaffirmed the assigned issuer/corporate credit ratings of CariBBB- (Local Currency Rating) and CariBB+ (Foreign Currency Rating) on the regional rating scale, and jmBBB+ (Local Currency Rating) and jmBBB (Foreign Currency Rating) on the Jamaica national scale for Access Financial Services Limited (AFS or the Group). A stable outlook was assigned.
RATING SENSITIVITY FACTORS:
Factors that could, individually or collectively, lead to an improvement in the ratings and /or outlook include:
- An improvement in the credit risk profile of the Government of Jamaica
- Improving business conditions over the next 12-15 months, thereby leading to growth in total asset base > 18% and/or sustained earnings growth > 10% over the next 2 years
- Diversity in revenue streams through the successful launch of new products
Factors that could, individually or collectively, lead to a lowering of the ratings/or outlook include:
- A deterioration in the credit risk profile of the Government of Jamaica
- Change in AFS’ debt/ TNW or TNW/Total Assets ratios > 1.5 times or < 25% respectively
- A sustained decrease in yield from interest earning assets > 600 basis points over the next 12-15 months, thereby leading to a tightening of the net interest spread earned
- A fall in AFS’ net loans and advances by more than 20%
- A deterioration in AFS’ Gross NPLs/Gross Loans ratio to > 8%
Analysts’ Contact Info:
Anelia Oudit
Mobile : 1-868-487-8364
Kyla Balwant
Seprod Limited
RATING ACTION:
On November 9, 2023, CariCRIS upgraded the assigned Issuer/Corporate Credit Rating by 1-notch to CariA (Local Currency Rating) on the regional rating scale and reaffirmed the Jamaica national scale ratings of jmAA- (Local Currency Rating) and jmA+ (Foreign Currency Rating) to Seprod Limited (Seprod or the Group). A stable outlook was assigned.
RATING SENSITIVITY FACTORS:
Factors that could, individually or collectively, lead to an improvement of the rating and/or outlook:
- An improvement in the GOJ’s credit rating over the next 12-15 months
- Sustained improvement in Group PAT by over 15% or more annually for another year
- An improvement in the effective DSCR to above 1.5 times respectively for the next 2 years
Factors that could, individually or collectively, lead to a lowering of the rating and/or outlook:
- A deterioration in the GOJ’s credit rating over the next 12-15 months
- The Group’s effective DSCR remains below 1.5 times
Analysts’ Contact Info:
Anelia Oudit
Mobile : 1-868-487-8364
Kyla Balwant
TRINRE Insurance Company Limited
RATING ACTION:
On September 14, 2023, CariCRIS reaffirmed the assigned Corporate Ratings of CariA (Foreign and Local Currency Ratings) on the regional scale and ttA on the Trinidad and Tobago national scale to TRINRE Insurance Company Limited (TRINRE or the Group). A stable outlook was maintained.
RATING SENSITIVITY FACTORS:
Factors that could, individually or collectively, lead to an improvement of the ratings and/ or Outlook include:
- An improvement in profit after tax of over 10% over the next 3 financial periods
- Growth in TNW by more than 17.5% or more for 3 consecutive financial periods
- Further diversification of business into other regional territories
- An improvement in the ratings assigned to the T&T sovereign
Factors that could, individually or collectively, lead to a lowering of the ratings and/ or Outlook include:
- A deterioration of the Company’s capital adequacy ratio to 150% or lower on a sustained basis for at least 6 months under normal conditions.
- A lowering of the ratings assigned to the T&T sovereign
- A lowering of the ratings of one of TRINRE’s main reinsurers
- Reduction in PAT by 10% or more for 1 consecutive financial period
- Reduction in TNW by 20% or more for 2 financial periods
Analysts’ Contact Info:
Keith Hamlet
Mobile : 1-868-487-8356
Maxwell Gooding