CariCRIS reaffirms “adequate creditworthiness” ratings of NCB Capital Markets (Barbados) Limited

CariBBB+ (Regional Scale Foreign Currency)

CariBBB+ (Regional Scale Local Currency)

bbAAA??????(Barbados National Scale Local Currency)

Caribbean Information and Credit Rating Services Limited (CariCRIS) has reaffirmed the Issuer/Corporate Credit Ratings assigned to NCB Capital Markets (Barbados) Limited (NCBCM Barbados, NCBCMBL or the Company) at CariBBB+ (Foreign and Local Currency Ratings) on the regional rating scale. These ratings indicate that the level of creditworthiness of this obligor, adjudged in relation to other obligors in the Caribbean, is adequate. These ratings include an uplift of 2 notches for implied support from NCB Capital Markets Limited (NCBCML or the Parent).

CariCRIS has also maintained a stable outlook on the ratings. The stable outlook is premised on CariCRIS’ expectation that NCBCMBL will remain adequately capitalised and profitable over the next 12-15 months. It is also expected that the Company will maintain an adequate liquidity position.

NCBCMBL’s ratings reflect the Company’s competitive advantage which lies in its strong affiliation with the NCB Financial Group, a leading financial service conglomerate in the Caribbean. Additionally, the Company’s resource base, which continues to grow while funding costs remain low, also supports the rating. Over the last 12 months, NCBCMBL’s performance was supported by stable asset growth, notwithstanding global and regional macroeconomic conditions and rising interest rates which challenged asset prices. Furthermore, NCBCMBL’s good financial performance, which is characterized by sustained profitability and adequate capitalization, continues to support the rating. These rating strengths are, however, tempered by the Company’s exposure to downside economic risks in Barbados, the Eastern Caribbean, and, to some extent, Jamaica.?

Rating Sensitivity Factors?

Factors that could, individually or collectively, lead to an improvement in the ratings and/or outlook include:

• Improvement in the credit risk profile of NCB Capital Markets Limited, the Parent
• Improvement in profitability over the next 12 to 15 months supported by earnings from the Eastern Caribbean region
• Successful roll-out of new services leading to further diversity in income-earning capability
• An improvement in the Tangible Net Worth (TNW) to total assets ratio to 18%?

Factors that could, individually or collectively, lead to a lowering of the ratings and/or outlook include:

• Significant deterioration in the credit risk profiles of the Government of Jamaica and/or the Government of Barbados
• Deterioration in the credit risk profile of the Parent
• Deterioration in Return on Earning Assets (ROEA) to below 1% sustained for 2 financial years
• Deterioration in Return on Equity (ROE) to below 15% sustained for 2 financial years
• Deterioration in the TNW to total assets ratio to below 10%
• Deterioration in the ratio of total earning assets to interest-bearing liabilities to below 1 time

For more information on NCBCM Barbados’ ratings, please visit www.caricris.com ?or contact:

?Dr. Kathryn Budhooram

Head, Rating Operations

Mobile: 1-868-706-6510

E-mail: [email protected]

OR

Mr. Keith Hamlet?

Manager, Ratings?

Mobile: 1-868-487-8356

E-mail: [email protected]

Note:

This rating release is transmitted to you for the sole purpose of dissemination through your agency/newspaper/magazine. You may use this rating release in full or in part without changing the meaning or context thereof, but with due credit to CariCRIS. CariCRIS has the sole right of distribution of its rating releases, for consideration or otherwise, through any media, including websites, portals, etc.