Caribbean Information and Credit Rating Services Limited (CariCRIS) has reaffirmed the regional scale issuer ratings assigned to NCB Financial Group Limited (NCBFG or the Group) of CariA+ (Local Currency) and CariA (Foreign Currency) and jmAAA (Local Currency) and jmAA+ (Foreign Currency) on the Jamaica national scale.

The regional scale ratings indicate that the level of creditworthiness of this issuer, adjudged in relation to other issuers in the Caribbean is good. 

The local currency national scale ratings indicate that the level of creditworthiness of this issuer, adjudged in relation to other issuers in Jamaica is the highest.

CariCRIS has also maintained a stable outlook on the ratings. The stable outlook is based on the expectations that over the next 12 to 15 months, NCBFG’s financial performance would likely improve, supported by its banking and insurance operations. Additionally, the improving economic conditions in its primary operating territories, along with the expected reduction in global interest rates are expected to positively impact the group’s financial performance.

Furthermore, the group’s subsidiaries are expected to remain well-capitalized over the next 12 to 15 months. NCBFG’s ratings continue to reflect its standing as a dominant regional financial services player, with a strong presence in the Jamaican banking and securities industries and regional insurance industry.

The group’s ratings are supported by strong capitalization levels and solid financial performance. Moreover, its high asset quality is bolstered by growing assets and a robust resource base. Furthermore, the group’s risk infrastructure remains strong, with an increased focus on technology that supports strategic planning.

These rating strengths are, however, tempered by the prevailing economic conditions in the operating territories, which could constrain growth.

Rating Sensitivity Factors:

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

• Improvement in the credit ratings of the Government of Jamaica (GoJ) and/or the Government of the Republic of Trinidad and Tobago (GoRTT) leading to an improved sovereign risk profile

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

• Deterioration of any of the subsidiaries’ CAR below the country-specific regulatory requirements
• Deterioration in the credit ratings of the Government of Jamaica (GoJ) and/or the Government of the Republic of Trinidad and Tobago (GoRTT) leading to a worsened sovereign risk profile

• Deterioration in cost-to-income ratio of 90% or above NCB Financial Group Limited (NCBFG or the Group), was incorporated in April 2016 and is a non-operating financial holding company for National Commercial Bank Jamaica Limited (NCBJ or the Bank) which supports the Group’s regional expansion initiatives.

NCBFG currently comprises NCBJ, TFOB (2021) Limited and NCB Global Holdings Limited (NCBGH) as three wholly owned subsidiaries, as well as Clarien Group (Clarien), a Bermuda-based banking, investment, and trust services financial group. NCBFG acquired 50.10% of Clarien in December 2017 and its subsidiary, and NCBGH acquired the majority shareholding (61.77%) of Guardian Holdings Limited (GHL or the Guardian Group) and its subsidiaries. In June 2024, NCBFG entered into a Share Purchase Agreement (SPA) with Cornerstone Financial Holdings Limited (CFHL), for the sale of 30.20% of Clarien Group Limited’s equity. Upon regulatory approval, NCBFG’s shareholdings in Clarien will fall to 19.9%.

NCBFG is listed on the Jamaica and Trinidad and Tobago stock exchanges (TTSE), and its top 3 shareholders as at June 2024 are AIC (Barbados) Limited (48.7%), MF&G Asset. The other shareholders of Clarien include Edmund Gibbons Limited and Portland Private Equity Limited (PPE) Management (3.98%) and Sagicor PIF Equity Fund (2.60%). The remaining 44.72% of the shares are distributed amongst other individual and institutional shareholders. NCBJ, the main operating subsidiary, currently has 7 active subsidiaries that operate in the commercial banking and securities industries. 

The bank offers an extensive range of products and services including commercial banking, stock brokerage, wealth and asset management, and pension fund management and administration. In February 2024, NCBJ announced the execution of a sale agreement with Berkeley Financial Holdings Limited in respect of NCBJ’s wholly owned subsidiary, NCB (Cayman) Limited.

The sale will be finalized once the required regulatory approvals are received.