DBRS Assigns Long-Term Issuer Rating of BBB (high), Stable to First West Credit Union

DBRS Limited (DBRS) assigned First West Credit Union (First West or the Credit Union) a Long-Term Issuer Rating of BBB (high) with a Stable trend. First West’s short-term ratings were confirmed on October 5, 2018.

The Support Assessment (SA) for First West remains at SA2, which reflects DBRS’s expectation of timely systemic external support from the provincial government through Central 1 Credit Union (Central 1), particularly in the form of liquidity, which is reflected in First West’s short-term ratings. DBRS currently rates Central 1’s Long-Term Issuer Rating at A (high) with a Stable trend. DBRS also rates the Province of British Columbia’s Issuer Rating and Long-Term Debt rating at AA (high) and its Short-Term Debt rating at R-1 (high), all with Stable trends.

RATING DRIVERS
Although DBRS views First West as well-placed within its rating category, over the longer term, enhanced market share through sustained membership growth, especially among younger members, could benefit the ratings. A significant strengthening in earnings through sustained revenue growth as well as a material improvement in First West’s efficiency ratio could have positive implications on the ratings. Conversely, material losses in the loan portfolio, particularly as a result of unexpected weakness in underwriting and/or risk management processes, could have a negative impact on the ratings. An inability to control costs or a sustained reduction in internal capital generation could also pressure the ratings.

Notes:
All figures are in Canadian dollars unless otherwise noted.

The related regulatory disclosures pursuant to the National Instrument 25-101 Designated Rating Organizations are hereby incorporated by reference and can be found on the issuer page at www.dbrs.com.

The applicable methodology is Global Methodology for Rating Banks and Banking Organisations (July 2018), which can be found on our website under Methodologies.

The primary sources of information used for this rating include company documents. DBRS considers the information available to it for the purposes of providing this rating was of satisfactory quality.

Lead Analyst: Robert Colangelo, Senior Vice President, Canadian Banking Financial Institutions
Rating Committee Chair: Michael Driscoll, Managing Director, Head of NA FIG

The rated entity or its related entities did participate in the rating process for this rating action. DBRS had access to the accounts and other relevant internal documents of the rated entity or its related entities in connection with this rating action.

For more information on this credit or on this industry, visit www.dbrs.com.