Dec 2007 Financial News

Standard & Poor's affirms NCB 'B/B' rating

Dec 28, 2007

Standard & Poor's Ratings Services, a major international rating entity has affirmed a 'B/B' counterparty credit rating for National Commercial Bank Jamaica Limited (NCB). The rating entity highlighted that the financial institution has maintained its stable outlook.

Credit Analyst Leonardo Bravo of Standard & Poor's explained the nature of the critical factors behind the assessment. "The ratings on NCB are constrained by the sovereign ratings on Jamaica because sovereign bonds and loans to public entities represent most of NCB's assets. The ratings are also constrained by NCB's larger-than-peer loan concentration in its main clients and its operating in a relatively small, highly indebted, and non-diversified economy. The ratings are supported by the bank's relevant market presence in the Jamaican banking system, adequate performance in a challenging environment, and consistent improvements in its operating performance," Bravo clarified.

Highlighting that government securities represent the majority of the bank's assets, Standard & Poor's also indicated that NCB's stability was due to its strong financial performance. "We believe that NCB can maintain adequate profitability ratios because of its important market share and the increasing focus on growing its consumer loan portfolio under prudent underwriting standards," confirmed Standard & Poor's.

NCB registered a net profit of J$6.6 billion for the 2006/7 financial year ending September 30th, exceeding profits recorded in the previous financial year by 20%, representing an increase of J$1.1 billion. The robust growth achieved by the bank and its subsidiaries, which include NCB Capital Markets and NCB Insurance Company, was driven primarily by a sustained focus on the core business, resulting in higher earnings from major income streams.

Source:
The Jamaica Observer
Friday, December 28, 2007

http://www.jamaicaobserver.com/magazines/Business/html/20071227T220000-0500_130796_OBS_STANDARD___POOR_S_AFFIRMS_NCB__B_B__RATING.asp