CDB scores Triple A rating

International credit rating agency Standard & Poor's (S&P) has placed an 'AAA' stamp on the Barbados-based Caribbean Development Bank (CDB), touting its high-performing loan portfolio and capital strength.

S&P, in its analysis of the bank's operations, cited strong capitalisation, adequate liquidity, a diversified loan portfolio as well as the bank's prominent position as a lender within the Caribbean as positives.

It also based its assessment on the recent demonstration of strong shareholder support in the form of a large increase in paid-in capital.

"The performance of CDB's loan portfolio to date has been excellent. The bank has reportedly never written off a loan, although some have been rescheduled, and its impaired loans totalled less than US$11 million, 1.3 per cent of total loans, as of yearend 2009."

S&P said that more than 95 per cent of CDB's loans were to or guaranteed by its member countries.

Its core income increased to more than US$30 million during 2009, from less than US$25 million one year earlier, while core income to average assets rose to 2.6 per cent from 2.3 per cent.

Return on average shareholders' equity also improved, from 5.1 per cent to 6.0 per cent.

With regard to the rating outlook for the bank, S&P characterises it as "stable", adding it "expects any reductions in CDB's capitalisation or liquidity to be modest and consistent with the current rating".

In a statement, CDB said that it welcomed the ratings by the US-based rating agency, and regards it as vote of confidence in its stewardship of the bank's assets as it seeks to promote the social and economic development of its borrowing member countries".

- CMC