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First Citizens receives top S&P ratings


The First Citizens Group is pleased to announce that one of the world’s leading provider of credit rating; S&P Global Ratings, has reaffirmed the Group’s ratings BBB/Stable/A-2. This is a clear reflection of the Group’s steady market position as the second largest bank in T&T's banking system in terms of loans and deposits as well as in a broad range of banking products.


The Report states, “The stable outlook on First Citizens Bank Ltd. (FCBL) for the next two years reflects our expectation that it will maintain its current market position and satisfactory operating performance--reflected in steady profitability metrics and manageable asset quality metrics--and sound capitalization levels, with a projected risk-adjusted capital (RAC) ratio at around 15.5%-16.0% on average during 2018-2019, thanks to its internal capital generation capacity.”


The Report also predicts a positive outlook for credit growth, asserting, “We expect credit growth to gradually rebound in the next two years thanks to modestly higher energy prices and the operation of new oil fields in the country. Nonperforming assets (NPAs) decreased to 2.4% this June from 3.9% in September 2016; in line with our projections due to the liquidation of a large problematic exposure.”


Adding that the high single-name loan concentration remains because of the bank's focus on corporate banking, the Report states, “FCBL will maintain manageable asset quality metrics compared to those of its domestic and regional peers.”


The ratings also reiterates that First Citizens’ “ stable funding, composed mainly of core deposits, and its prudent liquidity management that's reflected in its broad liquid assets in relation to the bank's short-term wholesale funding.”


Referring to the current financial situation in Barbados, the Report declares, “Stable and solid core operations in T&T compensate for challenging conditions in Barbados.”












What is the S&P Global Ratings?


The S&P Global Ratings and its predecessor organizations have been in business for more than 150 years. They are the world’s leading provider of credit ratings with more than 1 million credit ratings outstanding on government, corporate, financial sector and structured finance entities and securities.


In 28 countries around the globe, their analysts, managers and economists assess the factors and trends that affect creditworthiness. To inform their credit opinions, they engage in frequent dialogue with senior managers and industry leaders, and their analyses cover areas ranging from the state of an enterprise and its position in its industry, to the economic health of regions around the world.


What is the S & P Anchor: 'bb+' for commercial banks operating in Trinidad and Tobago? 


The S&P ratings bank criteria use their Banking Industry Country Risk Assessment's (BICRA) economic and industry risk scores to determine a bank's anchor, the starting point in assigning an issuer credit rating. Their anchor for First Citizens Bank Limited is 'bb+', reflecting the weighted average economic risk of '7.3', given the countries in which the bank has its major loan portfolio exposures--T&T (84%), Barbados (12%), and St. Lucia and Costa Rica (4%). The industry risk score for Trinidadian banks is '5' with a stable trend (see "Banking Industry Country Risk Assessment: Trinidad & Tobago," published June 1, 2018).

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