TTMB gets 'high' level of creditworthiness

THE Caribbean Information and Credit Rating Services Ltd (CariCRIS) has reaffirmed the credit ratings of CariAA- on the regional rating scale and ttAA- on the national scale to the Trinidad and Tobago Mortgage Bank Ltd (TTMB).

In a release on October 3, CariCRIS said these ratings indicate a high level of creditworthiness.

It added that the ratings include a one-notch uplift for the high likelihood of support from the government, if needed.

CariCRIS, however, also assigned a negative outlook on the ratings.

"The negative outlook is based on the high likelihood of a further weakening of TTMB’s asset quality, as measured by non-performing loans (NPL)/gross loans over the next 12-15 months.

"This is primarily due to a continued deterioration in the asset quality from its subsidiary, Home Mortgage Bank (HMB)," CariCRIS said.

It added that though some improvement is expected following the reconstitution of the board of directors, the group's overall NPL/gross loans is expected to remain above eight per cent for a second consecutive year.

"Nonetheless, the group is expected to remain profitable, well capitalised and comfortably meet its debt obligations as they come due," the release said.

CariCRIS added that the ratings of TTMB continue to reflect its moderate market position in TT’s real estate mortgage market, supported by its strategic role in executing the government's national housing policy.

"The ratings are further underpinned by the group’s comfortable capital position, evidenced by high capital adequacy and good capital to total assets ratios, bolstered by the acquisition of HMB.

"Additionally, TTMB’s strong financial performance in 2024, underpinned by the acquisition of HMB, continues to support the ratings," CariCRIS said.

It noted that, however, the ratings are constrained by persistent asset/liability mismatches, which elevate potential liquidity risks due to TTMB’s continued high reliance on debt financing.

"The group’s lack of geographic diversity in revenue and funding, which heightens its exposure to sovereign-related risks and weakening loan portfolio quality, due to rising NPLs from its subsidiary, also tempers the ratings."