The New York-based agency did, however, note that the capital adequacy metrics of Colombia’s biggest bank “remain relatively low” and that its ratings are constrained by “the operating environment of the jurisdictions in which Bancolombia’s businesses are performed.”

Specifically, Fitch Ratings affirmed Bancolombia’s viability rating at bbb and issuer default ratings at BBB.

The agency has based its view on Bancolombia’s improved operating efficiency and “solid performance in 2016,” which included higher interest income on earning assets, increased net fees, and an operating-profit-to-risk-weighed-assets ratio of 2.38%.

The firm’s Fitch Core Capital ratio rose as well, coming in at 9.62% of risk weighed assets in the first quarter this year compared to 8.32% in 2015. “Considering Bancolombia’s sound internal capital generation and Fitch’s expectations for continued moderate growth, the agency believes that the bank will sustain the positive trend in capital ratios,” stated the agency.

On the downside, Bancolombia has a low capitalization respective to other bbb-rated emerging market commercial banks and its past due loans increased to 2.38% in the first quarter compared to 2.01% a year earlier. This has been “caused primarily by slower loan growth, a moderate deterioration in some of the largest exposures in the commercial segment, and the seasoning of consumer loans,” stated Fitch Ratings.

In full, Fitch Ratings has set the following ratings for Bancolombia and subsidiaries:

Bancolombia

• Long-Term Foreign Currency IDR at BBB; outlook revised to stable from negative
• Short-Term Foreign Currency IDR at F2
• Long-Term Local Currency IDR at BBB; outlook revised to stable from negative
• Short-Term Local Currency IDR at F2
• Viability Rating at bbb
• Support Rating at 2
• Support Rating Floor at BBB-
• Senior unsecured debt at BBB
• Subordinated debt at BBB-
• National Long-Term Rating at AAA(col); outlook stable
• National Short-Term Rating at F1+
• Senior unsecured debt national rating at AAA(col)
• Subordinated debt national rating affirmed at AA+(col)

Bancolombia Panama

• Long-Term IDR at BBB; outlook revised to stable from negative
• Short-Term IDR at F2
• Support Rating at 2
• Long-Term Deposits at BBB
• Short-Term Deposits at F2

Bancolombia Puerto Rico

• Long-Term IDR at BBB; outlook revised to stable from negative
• Short-Term IDR at F2
• Support Rating at 2

Banistmo

• Long-Term IDR at BBB; outlook revised to stable from negative
• Short-Term IDR at F2
• National Long-Term Rating at AAA(pan); outlook revised to stable from negative
• National Short-Term Rating at F1+(pan)
• Support Rating affirmed at 2

Compania de Financiamiento Tuya

• National Long-Term Rating at AAA(col); outlook stable
• National Short-Term rating at F1+

Fiduciaria Bancolombia

• National Long-Term Rating at AAA(col); outlook stable
• National Short-Term rating at F1+

Valores Bancolombia

• National Long-Term Rating at AAA(col); outlook stable
• National Short-Term rating at F1+