KBRA Publishes Rating Report for The Bank of N.T. Butterfield & Son LimitedSource: Business Wire
The ratings for NTB are underpinned by its strong financial profile, which is characterized by a liquid and high-quality balance sheet, low cost of funds, and highly diversified revenue stream. Approximately 60% of total assets are either in the form of cash & short-term investments or highly rated investment securities, backed explicitly by the U.S. government. Deposits, along with equity capital, almost fully fund assets (96%); the deposit base, while lumpy and periodically prone to large outflows connected to business conditions in and outside of
These factors collectively help sustain the bank’s high risk-adjusted returns and capitalization and solidly position the bank in the high single A rating band. KBRA acknowledges that NTB operates in smaller, more economically concentrated markets without central bank existence and that it has occasionally been the subject of governmental inquiries as a result of its presence as an offshore financial intermediary domiciled or otherwise doing business in very low tax jurisdictions. The revenue diversity, in KBRA’s assessment, counters some of the economic and geographical limitations. In addition, KBRA views the bank’s policies and practices connected to the various forms of operational risk as robust.
To review the rating report, click here.
The ratings are based on KBRA’s
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Shannon L. Servaes, CFA, CPA, Senior Director
Van Hesser, Senior Managing Director