NCB Merchant Bank (T&T) Limited

 RATING DRIVERS

Supporting Factors

  • Competitive advantage lies in its affiliation with the NCB Financial Group
  • Good financial performance supported by continued profitability
  • Continued good asset quality notwithstanding a slight deterioration in the NPL ratio, it remains below that of the local industry
  • Comfortable capitalisation reflected in strong capital adequacy ratios and low leverage
  • Stable funding base, though small, adequately supports operations

Constraining Factors

  • Small player in a highly competitive market
  • Asset/ Liability maturity mismatch heightens short-term liquidity and refinancing risks
  • Small player in a highly competitive market
  • Asset/ Liability maturity mismatch heightens short-term liquidity and refinancing risks

Rating Sensitivity Factors

Factors that could, individually, or collectively lead to an improvement in the ratings and/ or Outlook include:

  • The successful rollout of the Company’s income rebalancing strategy leading to a greater contribution to total income from its Retail and Business Banking Division to over 40%
  • A reduction in the reliance on institutional funding to under 50%
  • Sustained increase in profitability of 10% over the next 3 years

Factors that could individually, or collectively lead to a lowering of the ratings and/ or Outlook include: 

  • Declining asset yields or rising funding costs, leading to a material contraction in spread income to below 1% over the next year
  • A systematic increase in liquidity pressures in the environment, leading to funding withdrawals in excess of 50% from large institutional investors, and a worsening of short-term TT$ liquidity measures over an 18-month period
  • Deterioration in the Parent’s (NCBCML) credit rating that could materially impact the extent of credit support available to NCB Merchant
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    • COMPANY BACKGROUND

       NCB Merchant Bank (T&T) Limited (“NCB Merchant or the Company”) (formerly NCB Global Finance Limited or NCBGF) was incorporated in the Republic of Trinidad and Tobago on 5 November 1982 and commenced operations in January 1983 as AIC Finance Limited. Effective 11 August 1993, the Company was licensed as a financial institution under the Financial Institutions Act 1993, to conduct the following classes of business: finance company, confirming house/ acceptance house, leasing corporation, and mortgage institution. On 26 August 2003, the Company was licensed by the Central Bank of Trinidad & Tobago (CBTT) as a merchant bank and thus permitted to engage in foreign exchange dealing.

       Analytical Contacts:

    •  Keith Hamlet

       Tel: 1-868-627-8879 Ext. 229
       E-mail: [email protected]
       Maxwell Gooding

       Tel: 1-868-627-8879 Ext. 229

       E-mail: [email protected]
       Website: www.caricris.com

       E-mail: [email protected]

      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.

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