FITCH HAS initiated rating coverage on Jamaica's National Commercial Bank Jamaica Ltd (NCBJ) and assigning it a stable rating outlook.
Long-term foreign currency was given a 'B+' rating; long-term local currency a 'B+'; and short-term foreign currency was given a 'B'. For short-term local currency the result was a 'B'; individual creditworthiness was assigned a 'D' and support was assigned a level of '4'.
These ratings reflect NCBJ's dominant domestic franchise, adequate profitability and capital levels, which are tempered by the bank's high exposure to the sovereign (65 per cent of assets at the end of September 2005) and lack of revenue diversification, as well as a constraining operating environment.
Fitch offers an international credit rating service. The long- and short-term ratings, along with the Stable Rating Outlook, are in line with Fitch's view of the creditworthiness of the Jamaican government. Future rating movements will be highly contingent upon a change in this view given NCBJ's sizeable sovereign exposure and the low level of current ratings.
IMPROVEMENTS IN RATINGS
Improvements in the individual rating will be contingent upon further diversification of NCBJ's balance sheet while sustaining current profitability, asset quality and capital levels.
Established in 1837, NCBJ is the second largest bank in the system with market shares of loans and deposits of 29.1 per cent and 35.1 per cent, respectively, at the end of September 2005. NCBJ boasts the largest network in Jamaica with 47 branches and 130 ATMs at the end of September 2005 and offers banking services to all market segments, as well as an array of specialised financial services through subsidiaries.
