TEXT-Fitch cuts Davivienda subs in Costa Rica, El Salvador

Tue Dec 4, 2012 5:33pm EST

Dec 4 - Fitch Ratings has downgraded and removed from Rating Watch Negative
Banco Davivienda (Costa Rica), S.A., Banco Davivienda Salvadoreno, S.A., and
Inversiones Financieras Davivienda, S.A.. The Rating Outlooks are Stable. A
complete list of rating actions follows at the end of this press release.

The rating actions follow the completion of the Colombian Banco Davivienda,
S.A.'s (Davivienda) acquisition of HSBC's operations in Costa Rica, El Salvador,
and Honduras. The acquisition agreement was announced early this year (please
refer to 'Fitch Places HSBC's Bank Subsidiaries in Costa Rica and El Salvador on
Rating Watch Negative', Jan. 27th, 2012 at www.fitchratings.com).

Davivienda is the new source of expected support for its Central American
subsidiaries, should it be required. The recently acquired entities are
considered by Fitch as Strategically Important to Davivienda, according to
Fitch's Criteria: 'Rating FI Subsidiaries and Holding Companies' listed below.
Such classification is based on Fitch's view on the role of those subsidiaries
to foster the expansion and diversification of Davivienda in Central America,
the reputational risk resulting from the shared franchise and commercial name,
and the intentions of the new shareholder to promote a well-balanced business
plan to the recently acquired operations in order to enhance their contribution
to the consolidated business. Fitch expects that these subsidiaries will provide
a recurring and meaningful share of revenues to the consolidated entity over the
medium-term.

Davivienda's current Long-Term Foreign Currency Issuer Default Rating (IDR) of
'BBB-' with a Stable Outlook, is lower than HSBC Holdings plc's 'AA', Negative
Outlook. Davivienda's current ratings were not reviewed in this rating action as
where affirmed on Jan. 27th, 2012 after the impact of the transaction was
assessed by Fitch.

Banco Davivienda (Costa Rica), S.A., Banco Davivienda Salvadoreno, S.A., and
Inversiones Financieras Davivienda, S.A.'s current ratings are driven by the
support they would receive from Davivienda, should it be required, rather than
by their intrinsic credit quality. The Stable Outlooks reflect that Fitch does
not anticipate substantial changes in Davivienda's ability and propensity to
support its new subsidiaries.

The Honduran bank's national ratings are unaffected as the potential support it
could receive from Davivienda allows it to maintain its long-term rating at
'AA+(hnd)'.

Davivienda is the third largest bank in Colombia. It is a universal bank
operating across all business segments with a particular strength in the
consumer business. The bank is controlled by Sociedades Bolivar, which has
interests in the construction and insurance industries in Colombia. After the
completion of the aforementioned transactions, Davivienda's new operations in
Central America will represent around 18% of its consolidated assets. The
subsidiaries in El Salvador, Costa Rica, and Honduras are locally self-funded,
with large participation of retail deposits, and sufficient capital according to
the regulatory guidelines in each country.

Fitch takes the following rating actions as indicated:

Banco Davivienda (Costa Rica), S.A.
--Long-term National Rating downgraded to 'AA+(cri)' from 'AAA(cri)'; Outlook
Stable; removed from Watch Negative;
--Senior Unsecured Debt Long-term National Rating downgraded to 'AA+(cri)' from
'AAA(cri)'; removed from Rating Watch Negative;
--Short-term National Rating affirmed at 'F1+(cri)'; removed from Rating Watch
Negative.

Banco Davivienda Salvadoreno, S.A.
--Long-term IDR downgraded to 'BB+' from 'BBB-'; Outlook Stable; removed from
Rating Watch Negative;
--Short-term IDR downgraded to 'B' from 'F2'; removed from Rating Watch
Negative;
--Support downgraded to '3' from '2'; removed from Rating Watch Negative;
--Long-term National Rating downgraded to 'AA+(slv)' from 'AAA(slv)'; Outlook
Stable; removed from Rating Watch Negative;
--Senior Unsecured Debt Long-term National Rating downgraded to 'AA+(slv)' from
'AAA(slv)'; removed from Rating Watch Negative;
--Short-term National Rating affirmed at 'F1+(slv)'; removed from Rating Watch
Negative;
--Senior Secured Debt Long-term National Rating affirmed at 'AAA(slv)'; removed
from Rating Watch Negative;
--Senior Unsecured Debt Short-term National Rating affirmed at 'F1+(slv)';
removed from Rating Watch Negative;
--Senior Secured Debt Short-term National Rating affirmed at 'F1+(slv)'; removed
from Rating Watch Negative.

Inversiones Financieras Davivienda, S.A.
--Long-term National Rating downgraded to 'AA+(slv)' from 'AAA(slv)'; Outlook
Stable; removed from Rating Watch Negative;
--Short-term National Rating affirmed at 'F1+(slv)'; removed from Rating Watch
Negative.


Additional information is available on www.fitchratings.com. The ratings above
were solicited by, or on behalf of, the issuer, and therefore, Fitch has been
compensated for the provision of the ratings.

Applicable Criteria and Related Research:
--'Global Financial Institutions Rating Criteria' (Aug. 15, 2012);
--'National Ratings Criteria' (Jan. 19, 2011);
--'Rating FI Subsidiaries and Holding Companies' (Aug. 10, 2012).

Applicable Criteria and Related Research:
Global Financial Institutions Rating Criteria
National Ratings Criteria
Rating FI Subsidiaries and Holding Companies
A couple walks along the rough surf during sunset at Oahu's North Shore, December 26, 2013. REUTERS/Kevin Lamarque

Find your dream retirement town

Florida? Hawaii? Reuters has teamed up with Zillow to give you the power to customize a list of your best places to retire.  Video | Full Article