RATING DRIVERS
Supporting Factors
- Strong presence in the Belizean commercial banking industry with a wide distribution network
- Robust Risk Management framework supported by digital initiatives
- Deposit base underpins stable funding costs and liquidity position
- Comfortable capitalization reflected in good coverage of total assets
- Continued profitable operations
- Improved asset quality
Constraining Factors
- High exposure to the heavily indebted Belize Government
- Financial system impacted by the loss of correspondent relationships with major international banks
Factors that could, individually or collectively, lead to an improvement in the ratings and/or outlook include:
- Improvement in the ratings of the Government of Belize
- Increase in profitability to the order of 10% per annum over the next 2 years
- Improvement in asset quality with a NPL ratio of 2.5% over the next 2 years
Factors that could, individually or collectively, lead to a lowering of the ratings and/or outlook include:
- Lowering of the ratings of the Government of Belize
- The occurrence of any factors that may contribute to the deterioration of the CAR below the 9% minimum requirement for the Bank sovereign risk profile
COMPANY BACKGROUND
The Belize Bank Limited (BBL or the Bank) was incorporated in Belize in July 1985 and is registered under the Domestic Banks and Financial Institutions Act, 2012. The Bank commenced its operations as Bank of British Honduras in 1903. In 1912, the Bank was purchased by the Royal Bank of Canada who eventually sold its shareholding in 1987 to a group of local investors and was subsequently rebranded as ‘The Belize Bank Limited’ in April 1987.
The Bank’s ultimate parent company, Caribbean Investment Holdings Limited (CIHL or the Company), was incorporated and registered in Belize under the International Business Companies Act, 1990 of Belize as amended by the International Business Companies (Amendment) Act, 1995 of Belize. The Company is currently listed on the Bermuda Stock Exchange.
In March 2021, CIHL acquired the operations of Scotiabank Belize Limited (SBL) following approval from the Central Bank of Belize. SBL was subsequently rebranded as Belize Bank Corporation Limited (BBCL) and will remain a subsidiary of CIHL until BBL and BBCL are merged to form a single entity, which is expected to happen in the first quarter of 2022.
As at June 2021, BBL held the position of the second-largest bank in Belize by assets with a market share of 26.2%, behind the largest bank with a 37.9% share[1]. BBL has a wide branch network that comprises 11 branches across all districts in Belize and a network of 28 ATMs.
[1] Atlantic Bank Limited (ABL) is the largest bank in Belize by assets, which stood at BZ $1.6 billion as at June 2021
Analytical Contacts:
Khadine Tavares
Tel: 1-876-618-8800 Ext. 9813
E-mail: ktavares@caricris.com
Keith Hamlet
Tel: 1-868-627-8879 Ext. 229
E-mail: khamlet@caricris.com
Website: www.caricris.com
Email: info@caricris.com
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