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