RATING ACTION:
On November 3, 2022, CariCRIS reaffirmed the assigned ratings of CariBBB (Foreign and Local Currency Ratings) on the regional rating scale, and jmA (Foreign and Local Currency Ratings) on the Jamaica national scale to PROVEN Group Limited (PROVEN or the Group). The stable outlook was maintained.
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
- An improvement in operating profit greater than 20% for 2 consecutive years
- Cost to Income ratio improves to 75% and below
- Improvement of asset quality ratio to below 8%
Factors that could, individually or collectively, lead to a lowering of the rating and/or outlook:
- Economic environment negatively impacting revenue streams leading to losses
- Increase of PROVEN’s stand-alone debt to equity ratio to above 2 times
- A systemic increase in liquidity pressures in the environment leading to funding withdrawals from large institutional investors
- Deterioration of asset quality ratio to over 12%
- Cost to Income ratio weakens to 75% and over for another year
- A deterioration in the GOJ’s credit rating over the next 12-15 months
RATING RATIONALE
Caribbean Information and Credit Rating Services Limited (CariCRIS) has reaffirmed the Corporate Credit Ratings of CariBBB (Foreign and Local Currency) on the regional rating scale, and jmA on the Jamaica national scale to PROVEN Group Limited (PROVEN or the Group). The regional scale ratings indicate that the level of creditworthiness of this obligor, adjudged in relation to other obligors in Jamaica and the wider Caribbean is adequate. The national scale ratings indicate that the level of creditworthiness of this obligor, adjudged in relation to other obligors in Jamaica is good.
CariCRIS has also maintained a stable outlook on the ratings. The stable outlook is premised on our expectation that PROVEN will continue to have profitable operations over the next 12-15 months supported by the Group’s recent acquisitions of Roberts Manufacturing Company Limited[1] (RMCL), PROVEN Bank (Cayman) Limited[2] (PBL) and Heritage Education Fund Limited[3] (HEFL) as well as its 20% equity interest in JMMB Group Limited (JMMBGL)[4]. Notwithstanding this, the global geopolitical environment and significant inflation concerns which have resulted in aggressive interest rates hikes, can challenge the Group’s overall financial performance over the next 12-15 months.
Analysts’ Contact Info:
Anelia Oudit
Mobile : 1-868-487-8364
Jeffrey James
Disclaimer: CariCRIS has taken due care and caution in compilation of data for this product. Information has been obtained by CariCRIS from sources which it considers reliable. However, CariCRIS does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. No part of this report may be published / reproduced in any form without CariCRIS’ prior written approval. CariCRIS is also not responsible for any errors in transmission and especially states that it has no financial liability whatsoever to the subscribers/ users/ transmitters/ distributors of this product.