National Commercial Bank Jamaica Ltd.

The stable outlook on NCBJ reflects that on Jamaica, which in turn reflects our view that the economic and fiscal risks of the pandemic have receded and there's less than a one-in-three chance we will change the rating in the next 12 months. The outlook also reflects our expectation that the economic recovery will strengthen, government finances will return to fiscal surplus in the next 12 months, and the effects of the pandemic will gradually recede. We could lower our ratings on the bank if we were to take the same action on Jamaica in the next two years. We would also downgrade NCBJ if its SACP worsens by two notches (to 'b'), which is not part of our base-case

...The bank retains good intrinsic creditworthiness, but its exposure to the sovereign still limits the ratings. National Commercial Bank Jamaica Ltd.'s (NCBJ's) stand-alone credit profile (SACP) remains '##-'. However, we limit the ratings on the bank by those on Jamaica (B+/Stable/B) because of the sovereign influence on the bank's credit profile, given its large exposure to the country in the form of loans and investments. NCBJ continues to have a strong market position as the largest bank in Jamaica, along with its diversified businesses and stable revenues. NCBJ is the leading bank on the island, holding about a third of the banking industry's market share in the last few years. The bank provides a wide range of banking products and services. The pandemic-induced economic shock pressured the bank's asset quality and profitability, but the situation remains manageable. The bank's good capitalization and provisioning has helped it to handle the impact relatively comfortably, and we expect...

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