Further to our Rating Watch issued on 17 August 2022, Caribbean Information & Credit Rating Services Limited (CariCRIS) has today suspended its ratings on Eastern Credit Union Co-operative Society Limited (ECU). As a result, ECU’s ratings will no longer be kept under annual surveillance by CariCRIS and there will be no further updates on these ratings.
21 November 2022
Category: Ratings Rationale
Eastern Credit Union Co-operative Society Limited (ECU)
NCB Capital Markets Limited
RATING ACTION:
On November 3, 2022, CariCRIS reaffirmed the assigned Issuer/ Corporate Ratings of CariA- (Local Currency Rating) on the regional scale and 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
The Jamaica National Group Limited
RATING ACTION:
On October 25, 2022, CariCRIS assigned the Issuer/Corporate Credit ratings CariBBB+ (Foreign Currency Rating) and CariA- (Local Currency Rating) on its regional rating scale and jmA+ (Foreign Currency Rating) and jmAA- (Local Currency Rating) on its Jamaica national scale to The Jamaica National Group Limited (JNGL or the Company). A stable outlook was also assigned.
RATING SENSITIVITY FACTORS:
Factors that could, individually or collectively, lead to an improvement in the ratings and/or outlook include:
- Expansion of the Group’s product and service offerings and/or improvements in operating efficiencies, leading to a sustained increase in PAT of 10% or more for more than 2 years
- Improvement in the credit rating of the Government of Jamaica, leading to an improved sovereign risk profile
- Improvement in the Group’s cost to income ratio to 65% or below for at least 2 consecutive years
- Improvement in the Group’s NPLs to gross loans to below 2.8%
- Improvement in the Group’s TNW to total adjusted assets to 20% or above
Factors that could, individually or collectively, lead to a lowering of the ratings and/or outlook include:
- A greater than 10% decline in the Group’s total income for 2 consecutive years
- Deterioration in the credit rating of the Government of Jamaica, leading to a worsened sovereign risk profile
- Deterioration in the Group’s TNW to total adjusted assets to 8% or below
- Deterioration of any of the Group’s subsidiaries’ capital adequacy ratios below regulatory requirements
- An increase in the Company’s gearing ratio to above 3 times
Analysts’ Contact Info:
Keith Hamlet
Mobile: 1-868-487-8356
Megan Dass
Access Financial Services Limited (AFS)
RATING ACTION:
On October 25, 2022, CariCRIS assigned initial 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
Jeffrey James
Government of The Republic of Trinidad and Tobago
RATING ACTION:
On September 15, 2022, CariCRIS reaffirmed the Issuer/Sovereign Credit ratings CariAA (Foreign and Local Currency Ratings) on its regional rating scale assigned to the Government of the Republic of Trinidad and Tobago (GORTT). A stable outlook was maintained.
RATING SENSITIVITY FACTORS:
Factors that could, individually or collectively, lead to an improvement in the ratings and/or outlook include:
- A decrease in total general government debt to below 65% of GDP over the next 12 months
- A sustained improvement in debt servicing capability to above 7 times over 2 consecutive years
- A fiscal surplus in excess of 3% of GDP sustained over 2 consecutive years
- A rise in import cover to 12 months or more over the next 24 months
Factors that could, individually or collectively, lead to a lowering of the ratings and/or outlook include:
- An increase in total general government debt to above 100% of GDP over the next 12 months
- A sustained deterioration in debt servicing capability to below 3 times over 2 consecutive years
- A fiscal deficit in excess of 10% of GDP sustained over 2 consecutive yearst:8-627-8879 Ext. 229
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- A fall in import cover to 6 months or less over the next 12 months
- Real GDP growth of < 1% in 2022 and/or growth of < 2% in 2023
RATING RATIONALE
Caribbean Information and Credit Rating Services Limited (CariCRIS) has reaffirmed the sovereign issuer credit ratings assigned to the Government of The Republic of Trinidad and Tobago (GORTT) of CariAA (Foreign and Local Currency Ratings) on its regional rating scale. These ratings indicate that the level of creditworthiness of this obligor, adjudged in relation to other rated obligors in the Caribbean, is high.
CariCRIS has also maintained a stable outlook on the ratings. The stable outlook is based on projected macroeconomic stability over the next 12 to 18 months, led by: (i) a return to real GDP growth in 2022 and continued expansion in 2023; (ii) robustness in T&T’s sovereign wealth fund over the medium term; (iii) improvement in fiscal balances as COVID-19 impacts draw to a close, along with some positive tax receipts improvements and expenditure control measures; (iv) resultant expectations for reduction in debt to GDP; (v) continued financial sector soundness and (vi) adequacy in international reserves and import cover.
Analysts’ Contact Info:
Stefan Fortuné
Phone: 1-868-799-6751 (m)
Megan Dass
Phone: 1-868-627-8879
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Government of Anguilla
RATING ACTION:
On September 15, 2022, CariCRIS reaffirmed the Issuer/Sovereign Credit ratings of CariBBB+ (Foreign and Local Currency Ratings) on its regional rating scale assigned to the The Government of Anguilla (GOA). A stable outlook was maintained.
RATING SENSITIVITY FACTORS:
Factors that could lead to an improvement in the Ratings and/ or Outlook include:
- Real GDP growth in excess of 5% over pre-hurricane level of GDP for at least 2 years
- A fiscal surplus of more than 5% of GDP recorded for at least 2 consecutive fiscal periods, with no breaches of debt metrics
- Meaningful diversification of the economy
Factors that could lead to a lowering of the Ratings and/ or Outlook include:
- An increase in debt to GDP ratio to above 70%
- A significant decline in grant support without other compensating revenues
- A change in the country’s status as a British Overseas Territory or a material change in the level of support rendered to Anguilla
- The banking sector’s capitalization ratio falling below 8%
Analysts’ Contact Info:
Stefan Fortuné
Phone: 1-868-799-6751 (m)
Brandon Singh
Phone: 1-868-627-8879
National Commercial Bank Jamaica Limited
RATING ACTION:
On September 15, 2022, CariCRIS reaffirmed the Issuer/Corporate Credit ratings CariA- (Foreign Currency Rating) and CariA (Local Currency Rating) on its regional rating scale and jmAA (Foreign Currency Rating) and jmAA+ (Local Currency Rating) on its Jamaica national scale assigned to National Commercial Bank Jamaica Limited (NCBJ or the Bank). A stable outlook was maintained.
RATING SENSITIVITY FACTORS:
Factors that could, individually or collectively, lead to an improvement in the ratings and/or outlook include:
- Improvement in the Government of Jamaica’s credit rating, leading to an improved credit risk profile of NCBJ
- Retail deposits ≥ 40% of funding base
- ROE > 20% sustained for 2 consecutive financial years
- Cost to income ≤ 50% for 2 consecutive financial years
Factors that could, individually or collectively, lead to a lowering of the ratings and/or outlook include:
- The occurrence of any factors that may contribute to the deterioration of the CAR below the 12.5% minimum requirement for the Bank
- The deterioration of the gross NPLs to gross loans ratio to 7.5% or more, leading to reduced earnings and increased provisioning, thereby affecting profitability
- Loans to Deposits ratio ≥ 80% for 2 consecutive financial years
- ROE < 8% sustained for 2 consecutive financial years
- Cost to income ≥ 70% for 2 consecutive financial years
Analysts’ Contact Info:
Keith Hamlet
Mobile: 1-868-487-8356
Megan Dass
Guardian Holdings Limited
RATING ACTION:
On September 15, 2022, CariCRIS reaffirmed the assigned ratings of CariAA- (Foreign and Local Currency Ratings) on the regional rating scale and jmAAA (Local Currency Rating) on the Jamaican national scale for Guardian Holdings 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:
- Expansion of the Group’s product and service offerings and/or improvements in operating efficiencies leading to a sustained increase in PAT of 20% or more for more than 2 years.
- An improvement in the credit rating of the Government of The Republic of Trinidad and Tobago.
Factors that could, individually or collectively, lead to a lowering of the ratings/or outlook include:
- A fall in GHL’s dividend receipts from the Group’s subsidiaries leading to a fall in the cash flow adequacy ratio below 1 time sustained for 3 financial periods.
- A lowering of the ratings of any of the Group’s top 5 reinsurers.
- A lowering of the credit rating of the Government of The Republic of Trinidad and Tobago.
- Breach of covenants stipulated in the final term sheet/ prospectus for the bond offering.
- Re-emergence of regulatory constraints on dividends payable by GHL’s major operating subsidiaries.
Analysts’ Contact Info:
Keith Hamlet
Mobile : 1-868-487-4356
Sultan Mohammed
Mobile : 1-1868-362-7304
NCB Financial Group Limited
RATING ACTION:
On September 15, 2022, CariCRIS reaffirmed the assigned regional ratings of CariA+ (Local Currency Ratings) and CariA (Foreign Currency) and jmAAA (Local Currency) and jmAA+ (Foreign Currency) on the Jamaica national scale for NCB Financial Group 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:
- Improvement in the credit ratings of the Government of Jamaica (GoJ) and/or the Government of the Republic of Trinidad and Tobago (GoRTT) leading to an improved sovereign risk profile.
Factors that could, individually or collectively, lead to a lowering of the ratings/or outlook include:
- Deterioration of any of the subsidiaries’ CAR below the country-specific regulatory requirements
- Deterioration in the credit ratings of the Government of Jamaica (GoJ) and/or the Government of the Republic of Trinidad and Tobago (GoRTT) leading to a worsened sovereign risk profile
- Deterioration in cost to income ratio of 90% or above
Analysts’ Contact Info:
Keith Hamlet
Mobile : 1-868-487-4356
Sharlene Gordon
Mobile : 1-1876-618-9811
ANSA Merchant Bank Limited (AMBL Group)
RATING ACTION:
On August 4, 2022, CariCRIS assigned initial issuer/corporate credit ratings of CariAA (Foreign and Local Currency Ratings) on the regional rating scale, and ttAA on the Trinidad and Tobago (T&T) national scale for ANSA Merchant Bank Limited (AMBL 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:
- Improvement in the credit rating of the Government of Trinidad and Tobago
- Successful acquisitions over the next 12 to 15 months with a concomitant material improvement in any of its main segments’ market share and AMBL Group’s overall financial performance
- Material improvement in the financial performance and position of the ANSA McAL Group
Factors that could, individually or collectively, lead to a lowering of the ratings/or outlook include:
- Substantial and sustained deterioration in PAT of more than 50%, with a greater than 10% fall in premium income and 55% decrease in NII, over 2 successive years
- A more than 40% increase in total operating expenses leading to a combined ratio in excess of 180%
- Downgrade in the rating of the Government of Trinidad and Tobago
- Material deterioration in the financial performance and position of the ANSA McAL Group
Analysts’ Contact Info:
Anelia Oudit
Mobile : 1-868-487-8364
Nadia Sanchez