(The following statement was released by the rating agency)
NEW YORK, February 06 (Fitch) Some performance deterioration in
2014 is expected
for Venezuelan banks due to severe macroeconomic imbalances,
contribute to operating environment risks, according to a Fitch
'A seasoning of credit portfolios, following high nominal loan
growth that has
exceeded more than 40% on average over the past three years
could also result in
a deterioration of Venezuelan banks' credit metrics,' said
Theresa Paiz Fredel,
Senior Director, Financial Institutions.
'Further government regulations and intervention could create
Nevertheless, absent a material increase in government
intervention or a severe
macroeconomic adjustment, bank financial metrics should remain
well within the
norm of similarly rated peers.
Venezuelan banks have a large, negative mismatch between
short-term assets and
liabilities, while funding greater than one year is limited.
position is manageable under Venezuela's current scheme of
Weaker profitability and internal capital generation could
ratios in the short term if growth does not decelerate from
Asset quality ratios have been stable to improving as nominal
gross loan growth,
driven by high inflation, has significantly outpaced growth of
Many banks have been proactively increasing reserves for
impaired loans in order
to face current macroeconomic imbalances. Given unseasoned loan
an economic shock could easily reverse asset quality trends.
For more information, a special report titled 'Peer Review:
Venezuelan Banks' is available on the Fitch Ratings web site at
www.fitchratings.com, or by clicking on the link.
Theresa Paiz Fredel
Fitch Ratings, Inc.
One State St. Plaza
New York, NY 10004
+571 326 9999, Ext. 1220
Media Relations: Elizabeth Fogerty, New York, Tel: +1 (212) 908
Additional information is available on www.fitchratings.com
Applicable Criteria and Related Research:
--â€˜Global Financial Institutions Rating Criteriaâ€™ (Aug. 15,
--â€˜National Scale Rating Criteriaâ€™ (Oct. 30, 2013);
--â€˜2014 Outlook: Andean Banksâ€™ (Dec. 16, 2013).
Applicable Criteria and Related Research: Peer Review: Private
Banks (Facing Macroeconomic Imbalances)
2014 Outlook. Andean Banks (Colombia, Ecuador, Peru and
National Scale Ratings Criteria
Global Financial Institutions Rating Criteria
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