CariCRIS reaffirms its corporate credit ratings for Home Mortgage Bank

Caribbean Information and Credit Rating Services Limited (CariCRIS) has reaffirmed the assigned Corporate Credit ratings of CariA- (Foreign and Local Currency Ratings) on the regional rating scale, and ttA- (Foreign and Local Currency Ratings) on the Trinidad and Tobago (T&T) national scale to Home Mortgage Bank (HMB). These ratings indicate that the level of creditworthiness of this obligor, adjudged in relation to other obligors in the Caribbean and within T&T is good.

CariCRIS has also assigned a stable outlook on the ratings. The stable outlook is based on the expectation that HMB will continue to maintain good financial performance over the next 12 to 15 months. This is underpinned by growth in its loans portfolio as a result of greater market reach and joint marketing initiatives with the Trinidad and Tobago Mortgage Bank Limited (TTMB)[1], following its acquisition in January 2024. Notwithstanding this, persistent elevated interest rates are anticipated to constrain HMB’s funding costs going forward. Nonetheless, HMB is expected to comfortably meet its debt obligations and maintain strong capitalization levels over the next 12 to 15 months.

HMB’s ratings are underpinned by its good financial performance in 2023, albeit lower profitability levels, coupled with adequate credit loan portfolio quality, notwithstanding a slight deterioration. The ratings also reflect strong capitalization, well above that of its peers, good liquidity bolstered by a diversified funding base and prudent risk management strategies. These ratings are constrained by the economic conditions within which HMB operates, that could present downside risks to its financial performance.

?Rating Sensitivity Factors:?

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

• An improvement in the credit rating of the sovereign over the next 12-15 months
• Improvement in HMB’s interest spread to > 3%, sustained over a 3-year period
• NPLs/Gross loans improve to 5% or below sustained over the next 12-15 months

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

• A deterioration in the credit rating of the sovereign over the next 12-15 months
• A sustained increase in the cost of funds by 100 bps or greater over the next 12-15 months
• NPLs >9% over the next 12-15 months
• A deterioration of the total earning assets/ total interest-bearing liabilities ratio to < 1 time.

For more information on the ratings of Home Mortgage Bank's rating, please visit www.caricris.com or contact:

Dr. Kathryn Budhooram

Head, Rating Operations

Cell: 1-868-706-6510

E-mail: [email protected]

OR

Ms. Anelia Oudit

Manager, Ratings

Cell: 1-868-487-8364

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.