KEY RATING DRIVERS - IDRS, NATIONAL RATINGS AND SENIOR DEBT
The bank's IDRs, National and senior debt ratings reflect the explicit sovereign guarantees for all state-owned banks stated in
RATING SENSITIVITIES - IDRS, NATIONAL RATINGS AND SENIOR DEBT
KEY RATING DRIVERS -
BNCR's capital position is adequate. The bank's
Favorably, BNCR has taken advantage of its capacity to issue subordinated debt and in
BNCR is the largest bank in the nation and holds a dominant market position in several business lines. The bank's ample and diversified deposits are a result of the explicit sovereign support, the strength of the bank's franchise, and its ample geographic coverage. Also BNCR funding is benefited by several regulations that name the bank as one of the recipients of some compulsory deposits from private owned banks.
The bank's loan portfolio is well diversified and shows moderate concentrations by individual creditor and by economic sector. BNCR investment portfolio has low credit risk exposure and is well administrated in order to comply with regulatory investment guidelines and to minimize capital charges and maintain liquidity requirements in local and foreign currency.
BNCR also benefits from a measured and well matched exposure to FX risk. Such exposure is controlled through the bank's limits to its open position in U.S. Dollars and its ability to obtain funding in both Colones and U.S. Dollars in the local and international market. BNCR foreign currency loans and deposit exposure is below the average of the system but still significant at 40% and 34%, respectively.
BNCR's asset quality has improved, while still below its peers' average. Non-performing loans have decreased to 2% of total loans and reserve coverage has also increased. In Fitch's opinion, the improved asset quality could positively affect year end results, as it reduces credit costs.
BNCR's operating ROAA remains below the median of similarly rated banks and also below the median of public owned banks in
RATING SENSITIVITIES -
Upgrades in the bank's
KEY RATING DRIVERS - SUPPORT RATING AND SUPPORT RATING FLOOR
BNCR's support rating (SR) of '3' reflects Fitch's opinion that there is a moderate probability of support from the state. In Fitch's opinion, the bank has a clear policy roll and the explicit support of the state. Support probability is limited by the sovereign rating. Given the explicit guarantee from the government towards the bank and its systemic importance; the bank SRF is equalized to the sovereign rating.
RATING SENSITIVITIES - SUPPORT RATING AND SUPPORT RATING FLOOR
BNCR's support SR and SRF are sensitive to changes in the sovereign rating
Fitch has affirmed BNCR's ratings as follows:
--Long-term IDR at 'BB+', Outlook Stable;
--Short-term IDR at 'B';
--Long-term local currency IDR at 'BB+', Outlook Stable;
--Short-term local currency IDR at 'B';
--Long-term senior unsecured bonds at 'BB+';
--Viability Rating at 'bb+';
--Support Rating at '3';
--Support Rating Floor at 'BB+'.
--Long-term national rating at 'AA+(cri)', Outlook Stable;
--Short-term national rating at 'F1+(cri)';
--Long-term senior unsecured bonds at 'AA+(cri)';
--Commercial paper at 'F1+(cri)'.
Additional information is available on www.fitchratings.com
--'Global Financial Institutions Rating Criteria' (
Global Financial Institutions Rating Criteria
Source: Fitch Ratings
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