S&P affirms Butterfield BBB

S&P said it affirmed its BBB and A-2 issuer credit ratings on Bank of N.T. Butterfield & Son Ltd. The outlook is positive. At the same time, S&P removed the under criteria observation (UCO) designation from the ratings.

“The removal of the UCO designation follows the application of our revised global criteria ‘Risk-Adjusted Capital Framework Methodology,’ published July 20, 2017, on RatingsDirect,” S&P said in a news release. “The affirmation reflects S&P’s unchanged assessment of BNTB's creditworthiness, which balances the bank's adequate capital assessment with better loan performance than its local peers.”

The assessment of the bank's risk position considers the bank's outperformance relative to its local peers' in terms of loan performance. S&P attributes this largely to the balance-sheet cleanup that BNTB undertook in 2010, which resulted in significant net charge-offs associated with hospitality and construction loans. Thereafter, the bank's nonperforming loans have trended downward in the past few years.

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