(The following statement was released by the rating agency)
NEW YORK, July 30 (Fitch) Fitch Ratings has affirmed Banco
Comercio Exterior's (Bladex) Issuer Default Rating (IDR) and
(VR) at 'BBB+' and 'bbb+', respectively. A complete list of
ratings is provided
at the end of this release.
Key Rating Drivers
Bladex's VR and IDR reflect its expertise in Latin American
outstanding asset quality, ample and proven liquidity, strong
moderate profitability. Fitch's view of Bladex's ratings is
tempered by its
narrow albeit stable margins and its loan and funding
Bladex is rated above the country's Sovereign rating as it has a
diversified balance sheet; the bank has proven it can weather a
default in one
of its key host countries and it has limited risk of having a
government impose restrictions on its debt service.
Bladex's support and support rating floor reflect Fitch's view
support for the bank, though possible, cannot be relied upon.
Bladex has developed a unique expertise and franchise since 1975
consolidated as the top regional foreign trade bank. This
expertise is a key
competitive factor in a region where trade is rapidly growing.
Asset quality improved through 1Q13 as the bank successfully
collected its PDLs
(PDLs down to 0% of gross loans). Loan loss reserves (LLR) stood
at 1.21% of
gross loans at the same date. Moreover, Bladex has set aside
additional LLR for
off-balance sheet credit risk. The total LLR coverage of gross
off-balance sheet credit risk stood at 1.25% at 1Q13.
In addition to having about 14% of its assets in bank deposits
and highly liquid
securities, Bladex has a very liquid loan portfolio that rolls
over at least
twice a year. This proved a key safeguard for the bank as it
navigated severe liquidity crunches. Bladex improved its funding
relying less on short-term borrowings and closing
Though lower than the peak levels of year-end 2009, capital
ratios are sound by
any standard and likely to remain in the mid-to-high teens, a
adequate given Bladex's low-risk business, asset quality,
reserves, and risk
The bank's narrow margins and the modest performance of trading
activities limit its profitability. Bladex's revenues stalled
expenses grew moderately and loan loss provisions put less
pressure on the
bottom line. Accordingly, efficiency and profitability declined;
ROAE stood at
about 8% at March 2013 and ROAA was about 1%. Preliminary
figures at 2Q13 show
an improved performance on higher loan volumes.
Bladex's key markets continue to enjoy positive albeit slower
loan growth and sound asset quality. Bladex should maintain
through asset growth, resilient margins, contained operating
costs, and little
provisions pressure thanks to its sound asset quality.
Interest margins showed remarkable stability through the crisis
but show some
erosion as interest rates increase. They reflect the low risk
nature of Bladex's
business (target market, products) and heighten the need to
achieve higher loan
volumes to underpin revenues.
Given its customer base (major regional banks and corporations),
the bank is
structurally concentrated on its loan portfolio. By the same
mainly from central/state-owned and commercial banks, is also
Bladex may expect some support from its main shareholders
(central banks of
Latin America), should it be required. However, given the
dilution of ownership,
support may be difficult to coordinate and cannot, in Fitch's
opinion, be relied
Going forward, Fitch expects that Bladex's Fitch core capital
will remain in the
14%-16% range and that profitability will stabilize around 1%
(ROAA) with asset
quality (PDLs) below 1.5%.
More stable revenues and a material reduction in credit and
concentrations could benefit Bladex's creditworthiness as this
could result in
lower risk and improved, more consistent profitability.
Significantly weaker margins, or important asset quality
erodes profitability and weakens the capital/reserves cushion
base case scenarios, could pressure Bladex's ratings downward.
Fitch has affirmed the following ratings for Bladex:
--Long-term foreign currency IDR at 'BBB+'; Outlook Stable;
--Short-term foreign currency IDR at 'F2';
--Viability rating: at 'bbb+';
--Support Rating at '5';
--Support Rating Floor at 'NF';
--Senior unsecured notes at 'BBB+';
--Senior unsecured certificates at 'AAA(mex)'.
Fitch Ratings, Inc.
One State Street Plaza
New York, NY 10004
Media Relations: Elizabeth Fogerty, New York, Tel: +1 (212) 908
Additional information is available at 'www.fitchratings.com'.
Applicable Criteria and Related Research:
--'Global Financial Institutions Rating Criteria' (Aug. 15,
--'National Ratings Criteria' (Nov. 19, 2011);
--'Rating Financial Institutions Above the Sovereign' (Dec. 11,
Applicable Criteria and Related Research:
Global Financial Institutions Rating Criteria
National Ratings Criteria
Rating Financial Institutions Above the Sovereign
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