RATING DRIVERS
Supporting Factors
- Strategic importance to the Government of Jamaica in the divestment of state assets and the allocation of capital to strategic investments
- Strong capital base supported by healthy capital adequacy ratio and good liquidity metrics
- Sound risk management framework supports strategic planning and business processes
- Comfortable financial performance as evidenced by continued profitability and asset growth albeit at lower levels
Constraining Factors
- High sovereign risk exposure with an elevated level of economic uncertainty
Rating Sensitivity Factors:
Factors that could, individually, or collectively lead to an improvement in the ratings and /or outlook include:
- An uplift in the creditworthiness of Jamaica, where DBJ derives 100% of its revenue, with an attendant improvement in business prospects for DBJ as well as improved profitability and loan portfolio quality
- Increase in ROA in excess of 3.5%, sustained over a 3-year period
Factors that could, individually, or collectively lead to a lowering of the ratings/or outlook include:
- A reduction in funding by more than 25%
- Interest rate spread falls by more than 150bps
- A lowering of the creditworthiness of Jamaica
COMPANY BACKGROUND
Development Bank of Jamaica Limited (DBJ) is a limited liability company domiciled in Jamaica and 100% owned by the Government of Jamaica (GOJ). It was formed on April 1, 2000, from the merger of the operations and selected assets and liabilities of the National Development Bank of Jamaica Limited and the Agricultural Credit Bank of Jamaica Limited. DBJ expanded further on September 1, 2006, when it took over the operations and selected assets and liabilities of the National Investment Bank of Jamaica Limited. DBJ has a 50% shareholding in Harmonization Limited, a property development company.
DBJ’s mandate is to facilitate economic growth and development in Jamaica by providing:
- Appropriate medium and long-term developmental financing solutions, particularly to micro, small and medium-sized enterprises through alliances with Approved Financial Institutions (AFIs) and Micro Finance Institutions (MFIs)
- Direct lending to strategic projects identified for their economic growth potential
- Management oversight of the Government’s Privatization and Public-Private Partnerships Programme and transactions
- An ecosystem conducive to venture capital as well as serving as an anchor investor in venture capital funds that operate in Jamaica.
Analytical Contacts:
Nadia Sanchez
Tel: 1-868-627-8879 Ext. 229
E-mail: [email protected]
Anelia Oudit
Tel: 1-868-627-8879 Ext. 226
Mobile: 1-868-487-8364
E-mail: [email protected]
Website: www.caricris.com
Email: [email protected]
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