Fitch Affirms Bermuda Commercial Bank Ratings
Fitch Ratings has affirmed the Long- and Short-term Issuer Default Ratings [IDRs] of Bermuda Commercial Bank [BCB] at ‘BBB-/F3′. The Ratings Outlook was revised to Stable from Negative.
A statement from Fitch said, “The affirmation of BCB’s IDRs reflects the company’s liquid balance sheet, which continues to be more liquid than its counterparts on the island, and the company’s strong capital position with Tier 1 Capital averaging in excess of 22%. With that said, Fitch believes BCB’s investment grade rating hinges on the company’s unusually strong liquidity profile and capital levels.
“BCB’s Outlook revision reflects a positive trend in lower levels of concentration risk in the company’s investment portfolio. The largest 20 investment holdings account for ~41% of the portfolio compared to ~51% a year earlier. Nonetheless, Fitch believes that further risk management efforts around the investment portfolio need to be developed in-house to maintain the Outlook and Ratings at current levels.
“IDRs & VR BCB operates with a very liquid balance sheet relative to its bank peers in Bermuda and the community bank peer group in the US. With average cash on hand at around 40% of total assets, Fitch views BCB’s balance sheet as sufficient to weather through a liquidity crisis, although such an event is considered unlikely at this point. BCB’s capital levels, on a tangible and risk adjusted basis, continue to be strong.”
