CariCRIS gives high rating for Republic Bank bond issue
CariCRIS has reaffirmed its high creditworthiness rating for Republic Bank’s TT$ 1 billion bond issue.
PORT OF SPAIN, Trinidad and Tobago, Thursday, February 23, 2012 – A debt issue by Republic Bank Ltd for TT$1 million has received top grading from the Caribbean Information and Credit Rating Services Limited (CariCRIS), the Caribbean’s only indigenous credit rating agency.
CariCRIS reaffirmed the ratings of CariAA+ (Foreign Currency Rating) and CariAA+ (Local Currency Rating) on the regional rating scale, and ttAA+ on the Trinidad and Tobago national scale to the debt issue of the size of TT $1 billion of Republic Bank Limited (RBL). These ratings indicate that the level of creditworthiness of this obligation, adjudged in relation to other obligations in the Caribbean and within Trinidad and Tobago is high.
The ratings agency said that their opinion on RBL reflected the Bank’s strong market position in Trinidad and Tobago, Barbados, Grenada and Guyana.
Furthermore, they added that the bank had a healthy resource base marked by a high proportion of retail deposits and geographical diversity, comfortable capitalization reflected in good coverage of total assets and high capital adequacy ratios.
“RBL has maintained good profitability measures, albeit at lower levels relative to the pre-crisis period, given the challenging regional macroeconomic environment,” stated a release by CariCRIS.
However, it acknowledged that its rating was tempered by the relatively weak asset quality of two of RBL’s subsidiaries – the Barbados National Bank and the National Bank of Grenada – whose non-performing loan ratios were weak.
Still, CariCRIS maintained that, at the group level, Republic’s performance was comparable with its peers. Loan loss provision coverage declined to just below 50% in FY20112, comparable to its regional peers, but exceeds 100% if the general contingency reserve account is included3.
In the medium term, CariCRIS added that it expected RBL to maintain its strong market position in Trinidad and Tobago, Barbados, Grenada and Guyana, on account of its established brand equity and large branch network.