Apr 2004 Financial News

S&P assigns Republic Bank 'BBB-' ratings

Apr 26, 2004

(The following statement was released by the rating agency)

NEW YORK, April 21 - Standard & Poor's Ratings Services said today that it assigned its 'BBB-/Stable/A-3' counterparty credit and CD ratings to Republic Bank Ltd.

The ratings on Republic Bank, a Trinidad & Tobago-registered bank, are underpinned by its leading market position in Trinidad & Tobago, good financial performance, and sound operating environment with good economic prospects, basically for Trinidad & Tobago. The bank's increasing geographic diversification in the Caribbean is also a rating consideration. Offsetting rating factors include a liability-sensitive balance sheet in terms of maturity, and the risks inherent to nonorganic growth, including management of new risks in the balance sheet and operational risks stemming from the incorporation of acquired entities.

Republic Bank benefits from its leading position in the Trinidad & Tobago banking system. As one of the largest players in the country, the bank holds a market share of around 40% in terms of deposits, and enjoys good brand-name recognition. Republic Bank reports a good financial profile. Low credit and market risks respond to a sound lending strategy with main exposures to highly rated countries, in particular Trinidad & Tobago (FC: BBB/Stable/A-2) and Barbados (FC: A-/Negative/A-2). Risk assets are well diversified among loans to local governments, "blue chip" Trinidadian corporations, and an important base of retail loans and mortgages. "Being one of the most important banks in Trinidad & Tobago, Republic Bank is expected to benefit and command a great share of the economic growth for this market," said Standard & Poor's credit analyst Silvia Ruiz.

The stable outlook considers Standard & Poor's expectations that Republic Bank's good financial performance and strong market presence will continue. In this regard, the bank is expected to maintain its good position to capture the strength of the local Trinidadian economy. While the incorporation of new subsidiaries brings in new businesses opportunities and risks in both the operational and credit arena, the bank should be able to maintain a sound financial profile and risk standards as observed in the past. Further developments on consolidated auditing and accounting processes are also expected to support the bank's performance. Complete ratings information is available to subscribers of RatingsDirect, Standard & Poor's Web-based credit analysis system, at www.ratingsdirect.com. All ratings affected by this rating action can be found on Standard & Poor's public Web site at www.standardandpoors.com; under Credit Ratings in the left navigation bar, select Find Ratings, then Credit Ratings Search.

Source: Reuters News Service