Regional rating agency Caribbean Information and Credit Rating Services Limited (CariCRIS), has moved its outlook for JN Group from stable to negative.
In a release, CariCRIS says the negative outlook is based on The Jamaica National Group's subsidiaries reporting losses for two consecutive years.
It says this loss position is expected to persist over the next 12 months, but at a lower level.
The rating agency says, given the challenged earnings, the Group's cost-to-income ratio is expected to remain elevated.
The ratings of the Holding Company reflect its good market position in Jamaica with subsidiaries in the United States, United Kingdom and the Caribbean.
CariCRIS says these subsidiaries continue to provide diverse income streams and support.
The rating agency says the outlook could improve with an expansion of the Group's product and service offerings and/or improvements in operating efficiencies.
An improvement in the credit rating of the Government of Jamaica, leading to an improved sovereign risk profile, along with an improved cost-to-income ratio, would also be a positive.
On the downside, a greater than 10 per cent decline in the Group's total income for two consecutive years, along with a deterioration in the credit rating of the Government of Jamaica, would lead to a worsened sovereign risk profile.
Reaffirmed
CariCRIS has also reaffirmed the Issuer/Corporate Credit Ratings of Jamaica National Group.
CariCris has kept JN's rating on a regional scale at CariBBB+ for its Foreign Currency Rating, and CariA- for local currency rating.
The rating agency has kept the National ratings for JN Group at jmA+) for Foreign Currency Rating in Jamaica, and jmAA- for local currency rating.
CariCRIS says the regional scale for Jamaica National Group's local currency rating indicates that the level of creditworthiness in the Caribbean is good.
The regional scale foreign currency rating indicates that the level of creditworthiness in the Caribbean is adequate.
The local ratings mean the level of creditworthiness in Jamaica is high, while the foreign currency rating indicates good creditworthiness.
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