Oct 2004 Financial News

Fitch Affirms RBTT Financial Holdings' Ratings, Outlook to Stable

Oct 11, 2004

NEW YORK--(BUSINESS WIRE)--Oct. 5, 2004--Fitch Ratings has affirmed RBTT Financial Holdings Limited's Long-term foreign currency rating of 'BB+' and the Rating Outlook is revised to Stable from Negative. Concurrently, Fitch has affirmed RBTT Bank Limited's Long-term foreign currency rating of 'BBB-', and the Rating Outlook remains Stable. A list of ratings is provided at the end of this press release.


The revision of Rating Outlook is reflective of improved asset quality, as nonperforming assets have declined in several of RBTT Financial Holdings Limited's (RBTT) markets outside of Trinidad and Tobago (T&T). The improvement in asset quality is due in part to more stable economic conditions and enhanced credit risk management initiatives, which include a more aggressive stance toward charging off problem loans and strengthening reserve coverage of nonperforming assets. That said, nonperforming assets in subsidiaries outside of T&T still account for a disproportionate portion of total nonperforming assets.

RBTT's acquisition-led regional expansion provides geographic diversity and additional opportunities for earnings growth, but it also leaves the company more exposed to sovereign and operating risks emanating from small and volatile economies. This added risk related to regional operations and the stronger Support rating assigned to RBTT Bank Limited are the rationale for the differential of ratings between the RBTT Group and its T&T-based lead bank. In addition to solid earnings, asset quality has remained relatively stable at RBTT Bank Limited. However, sizable single name exposures subject RBTT Bank Limited to potential event risk.

Overall, RBTT's ratings continue to take into account the company's earnings power. RBTT's capital ratios have been pressured by the balance sheet growth of the past few years but are in line with its rating category. Furthermore, short-term deposits are the norm in RBTT's markets, which contributes to the persistent duration mismatch in assets and liabilities. However, these deposits have historically been stable.

RBTT Financial Holdings Limited is a financial services conglomerate consisting of 35 subsidiaries and associated companies located in 12 legal jurisdictions in the Caribbean region, including 10 licensed commercial banks with 84 branches. The group's major subsidiaries include RBTT Bank Limited and RBTT Merchant Bank Limited, a leading regional merchant bank.

RBTT Financial Holdings Limited

-- Long-term foreign currency 'BB+';

-- Short-term foreign currency 'B';

-- Individual 'C/D';

-- Support '5';

-- Outlook to Stable from Negative.

RBTT Bank Limited

-- Long-term foreign currency 'BBB-';

-- Short-term foreign currency 'F3';

-- Individual 'C';

-- Support '3';

-- Outlook Stable.