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Tuesday, October 24 2017 @ 05:32 AM AST

S&P: First Citizens is T&T's 2nd largest bank

* Trinidadian universal bank First Citizens Bank Ltd. (FCBL) maintains a steady market position as the second largest bank in the country.

* In our view, the economy in Trinidad and Tobago is still recovering, which limits opportunities for loan growth to the private sector.

* We're affirming our 'BBB/A-2' ratings on the bank.

* The stable outlook reflects our expectation that FCBL will maintain its stable market position, very sound capital levels reflected in a projected risk adjusted capital (RAC) ratio at around 15.8% during 2017-2018, and manageable asset quality metrics.


S&P Global Ratings affirmed its 'BBB/A-2' issuer credit ratings on First Citizens Bank Ltd. (FCBL). The outlook remains stable.

The ratings on FCBL reflect its steady market position as the second largest bank in Trinidad and Tobago's (T&T) banking system in terms of loans and deposits as well as in a broad range of banking products. The bank has very sound capital levels, stemming from our forecasted average RAC ratio of 15.8% for 2017 and 2018 thanks to its robust internal capital generation and low loan portfolio growth. Despite potential risks from FCBL's high single-name loan concentration, we believe the bank has cautious risk management and underwriting standards that support its risk position based on its manageable asset quality compared to those of its domestic peers. Our ratings also reflect FCBL's stable funding, composed mainly of core deposits, and its prudent liquidity management that's reflected in its broad liquid assets in relation to the bank's short-term wholesale funding. The bank's stand-alone credit profile (SACP) remains at 'bbb'.

The bank maintains an important role for--and a strong link to--the government, but our ratings don't incorporate any uplift of support, according to our criteria for government-related entities (GREs). As a result, we believe there is a moderately high likelihood of sufficient and timely extraordinary government support to FCBL in the event of severe financial distress. We base our assessment on FCBL's current market position in T&T and its steady market share. We also consider FCBL's strong link to the government given the latter's high participation in the bank's shares.

FCBL is the only operative company of First Citizens Holding Ltd. (FCHL), the bank's holding group. FCHL, a non-operating company, doesn't have debt that could represent a potential leverage risk.

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