RATING DRIVERS
Supporting Factors
- The Company operates in an environment that is characterized by a strong institutional framework with effective regulatory oversight
- Continued profitable operations
- Adequate capitalization, underpinned by growing asset base
- Competitive advantage lies in strong affiliation with NCB Financial Group
Constraining Factor
- Current market conditions may challenge NCBKY’s profitability
Rating Sensitivity Factors
Factors that could, individually or collectively, lead to an improvement in the ratings and/ or Outlook include:
- 2 consecutive years of improved profitability as a result of higher income earned from investments and/or loans, thereby contributing to sustained earnings growth of around 10-15%.
Factors that could, individually or collectively lead to a lowering of the ratings and/ or Outlook include:
- A decline in investment yield leading to a contraction in the net interest rate spread to below 1% over the next 12 to 15 months.
- Gross loans to gross NPLs ratio of above 15% sustained for the next 12 months
- Deterioration in the credit rating of NCB Jamaica (the Parent of NCBKY) that could materially impact the extent of support available to NCB
COMPANY BACKGROUND
NCB (Cayman) Limited (NCBKY or the Company) was incorporated in the Cayman Islands on September 23, 1992 as an exempt company and operates under trust and unrestricted Class ‘B’ banking licenses[1] issued by the Cayman Islands Government. The Company is a wholly-owned subsidiary of National Commercial Bank Jamaica Limited (the Parent company or NCBJ), Jamaica’s largest commercial banking group, and offers banking and trust services from the Cayman Islands to clients in Jamaica and the wider Caribbean. The Company is regulated and supervised by the Cayman Islands Monetary Authority (CIMA).
As a boutique operation, NCBKY has grown to become a highly reputable private banking and wealth management service provider, offering a suite of services to high net worth individuals and corporate entities. The Company’s principal activities consist of the provision of banking and financial services to overseas clients. These products and services include investment advisory and management, wealth management and investment banking solutions, as well as other financial services for individual and institutional investors.
[1] As at September 2021 the Cayman Islands Monetary Authority (CIMA) listed 98 financial institutions as Class B Banks. – Source: Cayman Islands Monetary Authority – Banking Statistics. “Under the Banks and Trust Companies Law, holders of this license are permitted to carry on banking business anywhere in the world except in the Cayman Islands. Business may be carried on from the Cayman Islands for clients outside the jurisdiction and all management and other functions may be carried on in Cayman. This type of licence will also normally be granted only to a branch or subsidiary of a major international bank.” Source: Guide to Banks and Trust Companies in the Cayman Islands (Appleby)
Analytical Contacts:
Keith Hamlet
Tel: 1-868-627-8879 Ext. 244
Mobile: 1-868-487-8356
E-mail: [email protected]
Samuel Raphael
Tel: 1-868-627-8879 Ext. 234
E-mail: [email protected]
Website: www.caricris.com
Email: [email protected]
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