Durrant Pate/Contributor

National Commercial Bank’s (NCB’s) future credit card flows programme has been affirmed B ratings by international credit ratings agency, Fitch.

Fitch Ratings has affirmed the issue-specific ratings assigned to all outstanding series of notes issued by NCB through its Jamaica Merchant Voucher Receivables Limited (JMVR) and Jamaica Diversified Payment Rights Company (JDPR) at ‘BBB-‘ and ‘BB+’, respectively.

The rating outlook on the notes remains ‘stable’. JMVR is backed by future flows due from Visa International Service Association (Visa) and MasterCard International Incorporated (MasterCard) related to international merchant vouchers (MV) acquired by NCB in Jamaica. JDPR is backed by existing and future USD-denominated diversified payment rights (DPRs) originated by NCB.

Future credit card flows moderately high

The ratings agency reports that NCB’s future credit card flow has been assessed as moderately high, representing approximately 10.4 per cent of the bank’s total funding and 24.5 per cent of its non-deposit funding when considering the current outstanding balance on both programmes (J$640.25 million) as of April 2023.

Fitch considers the future flow ratio relative to the NCB’s total funding to be moderately high (greater than 10 per cent). Furthermore, Fitch expects the future flow programmes will remain a primary source of long-term funding for NCB, limiting the rating uplift on the notes.

GCA to gauge future flow transaction

Fitch uses a Strong Going Concern Assessment (GCA) score to gauge the likelihood that the originator of a future flow transaction will stay in operation through the transaction’s life. NCB’s GCA score of ‘GC1’ reflects its systemic importance as Jamaica’s largest bank.

The ‘GC1’ score allows for a maximum rating uplift of six notches from the bank’s Issuer Default Rating (IDR), pursuant to Fitch’s future flow methodology.