New York-based credit rating agency Fitch Ratings has affirmed its foreign-currency and local-currency issuer default ratings of Banco de Comercio Exterior de Colombia S.A.’s (Bancoódex) at BBB with a stable outlook.
This is in line with the BBB rating and stable outlook that Fitch Ratings has maintained for the nation of Colombia, which is the majority owner of Bancóldex.
The big three credit rating agency also affirmed its support rating floor at BBB for the Bogotá-based development bank as well as the national ratings of its subsidiaries ARCO Grupo Bancoldex S.A. Compania de Financiamiento (Arco) and Fiduciaria Colombiana de Comercio Exterior S.A. (Fiducoldex).
“The affirmation of Bancoldex’s IDRs reflects Fitch’s unchanged view of potential support, if it were needed, by the government of Colombia,” stated Fitch Ratings in its analysis.
Because Bancóldex is primarily a wholesale credit provider, it has slow growth, low margins, and low administrative costs, which combine to keep its volatility low as well. Though this could change if it ramps up is loan issuance, the bank’s operations and high asset quality, particularly given its governmental support, do currently not pose a troubling level of risk.
“Bancóldex’s creditworthiness and ratings are directly linked to those of the sovereign,” states Fitch. “Hence, its ratings and outlook should move in, line with any potential change in Colombia’s ratings.”