Friday, October 6, 2006

NEW YORK, USA: Fitch Ratings, a leading global credit rating agency, has downgraded Bermuda Commercial Bank's (BCB) short-term rating to 'F2' from `F1' and its Individual Rating to `C' from `B/C.' Fitch has also placed both ratings on Rating Watch Negative. BCB's Support rating remains unchanged at `5.'

Fitch said it believes that the legal issues and investigations surrounding John Deuss, owner of BCB's largest shareholder and also the bank's former Chairman, put strain on BCB's business reputation. While the bank's balance sheet remains highly liquid with satisfactory capacity to meet its financial obligations, the company's overall funding flexibility and margin of safety have been reduced.

As a result, Fitch has lowered the short-term rating one notch to 'F2.' The downgrade of the individual rating to `C' reflects BCB's narrow franchise, which is largely limited to the processing business, as well as the legal problems surrounding the controlling shareholder. Fitch has placed both ratings on Rating Watch Negative, since there is near-term potential for further adverse events and publicity.

Fitch said it views positively the fact that the resignations of Mr Deuss, former Chief Operating Officer Timothy Ulrich, and former Director Tineke Deuss have now been made permanent. In Fitch's view, BCB's management team headed by Senior Vice President Dominique Smith is experienced and capable of handling day to day transactions.

Bermuda Commercial Bank is the only Bermuda Bank primarily focused on serving the international business community. It was established in 1969, and is 47.29 percent owned by First Curacao International Bank N.V., a licensed bank operating in the Netherlands Antilles. In 1993, FCIB took over management from Barclays Bank plc, which had managed BCB from its inception

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