MOODY'S CONFIRMS Baa3 FOREIGN-CURRENCY DEBT AND Ba1 FOREIGN-CURRENCY DEPOSIT RATINGS OF COLOMBIAN COMMERCIAL BANKS
Moody's Investor's service has confirmed the Baa3 foreign-currency ratings of Colombian commercial banks for bonds and notes and the Ba1 foreign-currency ratings of Colombian banks for deposits. At the same time, the rating agency indicated that the foreign-currency ratings of Colombian banks maintain a negative outlook. This action follows Moody's confirmation of the Republic of Colombia's Baa3 foreign-currency country ceiling for bonds and notes as well as the Ba1 country ceiling for deposits. A separate press release concerning the foreign-currency country ceilings of the Republic of Colombia is being issued simultaneously.
The rating agency indicated that the recently enacted economic emergency represents an effective and preemptive action by the government in response to increased weaknesses within the financial sector, particularly those of the savings and mortgage entities. However, the persistence of a high interest rate environment could further erode asset quality and profitability of the commercial banks which, thus far, have been able to withstand a deterioration of the operating environment.
The following ratings have been confirmed with a negative outlook:
BanColombia S.A. -- Baa3/Ba1 for foreign-currency debt/deposits;
Banco Ganadero S.A. - - Baa3/Ba1 for foreign-currency debt/deposits;
Banco de Bogota S.A. -- Ba1 for foreign-currency deposits;
Banco Popular S.A. -- Ba1 for foreign-currency deposits; and,
Bancafe S.A. -- Ba1 for foreign-currency deposits.
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