News Column

Fitch Affirms Credomatic International Corp's IDR at 'BBB'; Outlook Stable

July 1, 2014

NEW YORK & SAN SALVADOR, El Salvador--(BUSINESS WIRE)-- Fitch Ratings has affirmed Credomatic International Corporation's (CIC) long-term Issuer Default Rating (IDR) at 'BBB' and Support Rating at '2', while the Support Rating Floor of 'NF' was withdrawn. The Rating Outlook is Stable. A full list of CIC's ratings follows at the end of this press release.

KEY RATING DRIVERS

CIC's IDRs and Support Rating reflect the high probability of support it would receive from its parent, Banco de Bogota (rated 'BBB/F2'), should it be required. Furthermore, Fitch has withdrawn CIC's Support Rating floor of 'NF', since Fitch considers that institutional support is the most likely source of support should this be required, rather than support from the sovereign. Banco de Bogota's ability to support CIC is reflected in its IDR, and, in the agency's opinion, the financial support to CIC would be timely and sufficient. CIC is considered a 'core' subsidiary of its parent, based on its meaningful size, its important contribution to consolidated net income, and its key role in the group's regional strategy.

The Stable Outlook reflects that in the opinion of the agency, CIC's IDR will likely remain unchanged over the foreseeable future, while Banco de Bogota keeps its risk profile.

CIC is a company incorporated in the British Virgin Islands and groups BAC/Credomatic's credit card businesses and commercial banking operations in each Central American country with the exception of Panama. BAC/Credomatic is one of the largest financial groups in Central America. As of December 2013, CIC has USD12.2 billion in assets and is a leader in the credit card business, while having a dominant market share in the acquiring and issuing businesses.

CIC represents a significant part of Banco de Bogota's consolidated assets (23.3% as of December 2013) and net income (37.0%). This reflects the fundamental importance of its performance to its parent's results, and its key contribution to the achievement of the group's strategy.

CIC exhibits a solid financial performance. The entity's bank subsidiaries are consistently among the most profitable banks in each country, driven by a well-developed revenue structure that balances interest income and fees and commissions, good operating efficiency, and low loan impairment charges.

BAC/Credomatic's activities are robustly funded on a standalone basis by country and legal entities. The group has developed an adequate customer deposits base that is complemented by an ample ability to obtain funding from various sources.

CIC's capitalization declined after the acquisition of Grupo Financiero Reformador in December 2013. Total assets grew 34.51% which exceeded the entity's internal capital generation rates. Nevertheless, Fitch estimates that the entity's profitability, reasonable dividend payments, and expected moderate asset growth will drive a recovery of entity's capital ratios.

RATING SENSITIVITIES

Changes in CIC's IDR and Support Rating would reflect changes in Banco de Bogota's ability and/or propensity to provide support, in case of need. The IDRs would move in line with Banco de Bogota's rating.

Fitch has affirmed the following CIC ratings:

--Foreign currency long-term IDR at 'BBB'; Outlook Stable;

--Foreign currency short-term IDR at 'F2';

--Support rating at '2';

In addition:

--Support rating floor of 'NF' was withdrawn.

Additional information is available at 'www.fitchratings.com'.

Applicable Criteria and Related Research:

Global Financial Institutions Rating Criteria (Jan 31, 2014)

Rating FI Subsidiaries and Holding Companies (Aug 10, 2012)

2014 Outlook: Central America and the Dominican Republic (Dec 16, 2013)

Applicable Criteria and Related Research:

Global Financial Institutions Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=732397

Rating FI Subsidiaries and Holding Companies

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=679209

2014 Outlook: Central America and the Dominican Republic

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=725825

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=837540

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.



Fitch Ratings

Primary Analyst

Diego Alcazar

Director

+1 212-908-0396

Fitch Ratings, Inc.

33 Whitehall Street

New York, NY 10004

or

Secondary Analyst

Rolando Martinez

Director

+503-2516-6619

or

Committee Chairperson

Alejandro Garcia

Managing Director

+52 (81) 8399-9146

or

Media Relations, New York

Elizabeth Fogerty, +1 212-908-0526

elizabeth.fogerty@fitchratings.com

Source: Fitch Ratings


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