Caribbean Information and Credit Rating Services Limited (CariCRIS) has reaffirmed the ratings of CariBBB+ (Foreign and Local Currency Rating) on the regional rating scale with a stable outlook on the USD 30 million debt issue of the Eastern Caribbean Home Mortgage Bank (ECHMB). These ratings indicate that the level of creditworthiness of this obligation, adjudged in relation to other obligations in the Caribbean is adequate.
The reaffirmation is being driven by the recognition by CariCRIS that this is a transitionary year for ECHMB. In 2016, the Bank decided to expand its mandate by placing more emphasis on the investment side of the business. This will be done via the broadening of the range of financial assets which the Bank can invest in by widening the permissible jurisdictions for its investments to include the wider Caribbean region and the United States. This strategic shift is as a result of the challenging environment in which the Bank continues to operate. Further supporting the ratings is the Bank’s good liquidity position and improving cost of funds which will augur well for the expected increase in investment activity by the Bank. The rating is also supported by ECHMB’s adequate risk management and information systems, though CariCRIS recognizes the need for a more comprehensive enterprise risk management framework. The rating continues to be tempered by ECHMB’s declining profitability, though net interest spread remained stable over the past year.
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