Last update: 23-Apr-2014 5:32 am
Wednesday, April 23, 2014
Trinidad & Tobago Guardian Online
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Standard & Poor’s: First Citizens gets BBB-plus rating
State-owned First Citizens Bank Ltd has been consistently profitable, Standard & Poor’s (S&P) credit rating agency said in its latest rating of the bank.
S&P said: “Our stable outlook on T&T-based bank First Citizens Bank Ltd reflects our expectation that the bank will maintain its ‘very strong’ capitalisation, with consistent profitability and improved asset quality over the next two years. In accordance to our methodology for government-related entities (GREs), if we raise the ratings on T&T by one notch, we would raise the ratings on First Citizens.
“Conversely, if the risk-adjusted capital (RAC) ratio falls below, and remains between ten per cent and 15 per cent, we could lower the bank’s stand-alone credit profile (SACP). The issuer credit rating (ICR) would not change, based on our GRE criteria.”
S&P also gave a rationale for reaffirming its long held rating on First Citizens. S&P gave the bank a BBB+ rating this week, as it did on July 31, 2007 (BBB+) and September 3, 2004 (BBB). An AAA rating is the highest, followed by AA, A, BBB, BB, B, CCC, C, R, SD, D and NR. Up to BBB is considered “investment grade,” meaning the ratings agency considers it safe to invest in the company or country.
S&P’s rational was that “the ratings on $35.8 billion asset in First Citizens reflects the bank’s ‘very strong’ capital and earnings, ‘adequate’ business and risk positions, ‘average’ funding, and ‘adequate’ liquidity profile. We believe that there is a ‘moderately high’ likelihood of support from the government of T&T. However, we haven’t incorporated any notches of support into our ratings on the bank. The bank’s SACP is ‘bbb+’.”
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