DBRS Assigns Long-Term Ratings of BBB (high) to Coast Capital Savings Credit Union, Stable Trend

DBRS Limited (DBRS) assigned Coast Capital Savings Credit Union (Coast Capital or the Credit Union) a Long-Term Issuer Rating and Long-Term Senior Debt rating of BBB (high) with a Stable trend. Coast Capital’s short-term ratings, which were confirmed on August 16, 2017, are unchanged.

The Credit Union’s Support Assessment remains at SA2, which reflects DBRS’s expectation of timely systemic external support from the Province of British Columbia (the Province) through Central 1 Credit Union (Central 1), particularly in the form of liquidity, as implied in the Credit Union’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’s Issuer Rating and Long-Term Debt rating at AA (high) and its Short-Term Debt rating at R-1 (high) with Stable trends.

RATING DRIVERS
Although unlikely over the intermediate term, ratings could be positively affected by sustained membership growth, especially among younger members, or a significant improvement in revenue through the growth of non-interest income and/or improved efficiency. Alternatively, ratings could come under pressure should Coast Capital be unable to manage funding as it moves to a federal charter and deposit insurance coverage is reduced causing deposit outflows. Furthermore, significant losses in the loan portfolio as a result of unforeseen weakness in the underwriting and/or risk-management process, an inability to control costs or a sustained reduction in internal capital generation could also have a negative impact on 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 (May 2017), which can be found on our website under Methodologies.

Lead Analyst: Maria-Gabriella Khoury, Vice President, Canadian Financial Institutions Group
Rating Committee Chair: Michael Driscoll, Managing Director, Head of North American Financial Institutions Group

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.