S&P holds First Citizens rating steady

International credit rating agency, S&P Global Ratings, has maintained state financial institution First Citizens Group’s BBB/Stable/A-2 rating. According to S&P’s scale, BBB is the long-term outlook, while A-2 is short-term.

While both ratings reflect an ability to meet current obligations, and satisfactory to adequate coverage and protection parameters, they also point to vulnerability to changing economic conditions or circumstances.

“This is a clear reflection of the Group’s steady market position as the second largest bank in TT’s banking system,” First Citizens said in a release.

Although the bank did not release the report, it did quote excerpts:

“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… 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.”

First Citizens also noted that S&P believed the bank’s high single-name loan concentration remains because of its focus on corporate banking, although it will maintain manageable asset quality metrics compared to regional and domestic peers.

Referencing the report, First Citizens said its stable funding, composed mainly of core deposits, and prudent liquidity management is reflected in its broad liquid assets in relation to short-term wholesale funding. Stable and solid core operations in TT also compensate for challenging conditions in Barbados.