Fitch has affirmed the short-term and individual ratings of Bermuda Commercial Bank (BCB) and has removed the ratings from "rating watch evolving".

Fitch said its action reflects recent developments indicating BCB's previously announced efforts to seek a buyer or strategic partner for the bank may not be completed in the near future.

The action also reflects the stabilisation of BCB's funding base, improved profitability and liquid balance sheet, after the losses in deposits in the second half of 2006 which followed the fraud investigation surrounding the Bank's former chief executive officer and chairman John Deuss.

For these reasons, BCB's ratings are unlikely to change in the near term and Fitch decided the "evolving watch" status is no longer appropriate.

In February 2008, BCB disclosed in a letter to shareholders that the proposed sale or strategic partnership announced over 18 months ago has subsequently taken much more time than initially anticipated.

Despite efforts by BCB to close on an agreement, the controlling shareholder, the Central Bank of Netherlands-Antilles (CBNA), has not approved a proposed deal. Further, the timeline to reach an agreement with a strategic partner or an outright purchaser of the bank is not clear at this time. CBNA is currently the largest shareholder due to its seizure of FCIB.

The rating affirmation reflects BCB's highly liquid, low credit risk balance sheet evidenced by approximately 99 percent of total assets comprised of cash and cash equivalents. More recently, BCB's deposit levels have stabilised following a significant decline during the latter half of 2006.

Also over the past two years, BCB performed a review of its client base that led to the termination of a number of client relationships. Although profitability measures are slightly lower than the peak level recorded in 2005, overall BCB's earnings have remained relatively stable despite the challenges it has managed through. Fitch has affirmed the Bank's short-term rating at F2 and individual rating at C.