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Rating Action:

Moody's takes rating actions on banks in Colombia and Peru

10 Jun 2015

Actions follow conclusion of methodology-related review and revision of government support considerations

New York, June 10, 2015 -- Moody's Investors Service has concluded its rating reviews on Colombia's Banco de Bogotá S.A. and Grupo Aval Acciones y Valores S.A. (Grupo Aval). These reviews were initiated on 17 March 2015 (see press release at https://www.moodys.com/research/Moodys-reviews-global-bank-ratings--PR_321005), following the publication of Moody's new bank rating methodology.

These reviews concluded with the lowering by one notch of Banco de Bogotá's baseline credit assessment (BCA) and adjusted BCA, and the following rating downgrades:

-- Banco de Bogotá's long-term global local currency (GLC) deposit rating, long-term foreign currency senior unsecured debt rating and foreign currency subordinate debt rating. Banco de Bogotá's other ratings have been affirmed.

-- Grupo Aval's long- and short-term local and foreign currency issuer ratings and Grupo Aval Limited's backed senior unsecured foreign currency debt ratings.

In addition, Moody's has affirmed, with a stable outlook, the ratings of seven other banks in Colombia and Peru, and three Panamanian affiliates. In Colombia, this includes Bancolombia S.A., Banco Davivienda S.A., Banco Bilbao Vizcaya Argentaria Colombia S.A. (BBVA Colombia) and Banco GNB Sudameris S.A. (GNB). In Peru, the three banks are Banco de Crédito del Perú (BCP), Scotiabank Perú S.A.A. and Banco Internacional del Perú S.A.A. -- Interbank. In Panama, this includes Banco de Bogotá's subsidiary, BAC International Bank, Inc. (BAC), Banco de Crédito del Perú, Panama Branch and Banco Internacional del Perú (Panama Branch).

Today's actions reflect the new aspects of Moody's bank rating methodology published on 16 March 2015 (see "Banks," http://www.moodys.com/viewresearchdoc.aspx?docid=PR_320662).

Moody's has withdrawn the outlooks on the foreign currency subordinate debt ratings of Banco de Bogotá, Bancolombia, Davivienda, BBVA Colombia, GNB, BCP, BCP's Panama branch, Scotiabank Perú and Interbank; as well as the local currency subordinate debt rating of BCP, for its own business reasons. Please refer to Moody's Investors Service's Policy for Withdrawal of Credit Ratings, available on its website, www.moodys.com. Outlooks, which provide an opinion on the likely rating direction over the medium term, are now assigned only to long-term deposit and senior unsecured debt ratings.

Moody's has also assigned Counterparty Risk (CR) Assessments to each of the banks and their affiliates covered in this press release. CR Assessments are opinions of how counterparty obligations are likely to be treated if a bank fails, and are distinct from debt and deposit ratings in that they (1) consider only the risk of default rather than expected loss and (2) apply to counterparty obligations and contractual commitments rather than debt or deposit instruments. The CR Assessment is an opinion of the counterparty risk related to a bank's covered bonds, contractual performance obligations (servicing), derivatives (e.g., swaps), letters of credit, guarantees and liquidity facilities.

The CR Assessment takes into account the issuer's standalone strength as well as the likelihood of affiliate and government support in the event of need, reflecting the anticipated seniority of these obligations in the liabilities hierarchy. The CR Assessment also incorporates other steps authorities can take to preserve the key operations of a bank should it enter a resolution.

For Colombian and Peruvian banks and their affiliates, the CR Assessment is positioned, prior to government support, one notch above the Adjusted BCA and therefore above senior unsecured and deposit ratings, reflecting Moody's view that its probability of default is lower than that of senior unsecured debt and deposits. Moody's believe that senior obligations represented by the CR Assessment will be more likely preserved in order to limit contagion, minimize losses and avoid disruption of critical functions.

For Banco de Bogotá, Bancolombia, Davivienda, GNB, BCP and Interbank, their CR Assessments also benefit from government support in line with Moody's support assumptions on deposits and senior unsecured debt. This reflects Moody's view that any support provided by governmental authorities to a bank which benefits senior unsecured debt or deposits is very likely to benefit operating activities and obligations reflected by the CR Assessment as well, consistent with Moody's belief that governments are likely to maintain such operations as a going-concern in order to reduce contagion and preserve a bank's critical functions.

RATINGS RATIONALE

The new bank rating methodology includes a number of elements that Moody's has developed to help accurately predict bank failures and determine how each creditor class is likely to be treated when a bank fails and enters resolution. These new elements capture insights gained from the crisis and the fundamental shift in the banking industry and its regulation.

In light of the new methodology, Moody's rating actions generally reflect the following considerations: (1) the "Moderate +" macro profiles for both Colombia and Peru; (2) the banks' core financial ratios; and (3) the likelihood of government support for these institutions.

COLOMBIAN BANKS

1) Colombia's "Moderate +" macro profile

Colombian banks benefit from the country's robust economic growth outlook, supported by strong domestic demand, though tempered by low GDP per capita. A favorable investment climate and policy predictability, despite average indicators for government effectiveness, also supports growth potential. However, Colombia faces event risk related to its dependence on oil exports as well as ongoing problems with armed insurgencies, with whom peace negotiations are progressing, albeit slowly.

Colombian banks' foreign operations are mainly focused on Central American countries, whose individual macro profiles range from Moderate (Panama) to Weak (Guatemala). While Central American operations add geographic diversification to the Colombian banks' balance sheets and give them access to clients in countries with high growth potential, they also expose the banks to operating environments with low economic and institutional strength.

2) Good asset quality and ample profitability offset by weak capitalization

Colombian banks' profitability continues to be ample, supported by high net interest margins and low credit and operating costs. The banks' proactive risk management and focus on commercial lending and high quality retail lending, both at home and abroad, continues to ensure good asset quality, as demonstrated by the banks' low past due loan ratios and strong reserve coverage. Access to core funding from customers offset lower levels of liquid assets when compared to regional peers. The banks' ratings are nevertheless constrained by weak capitalization levels, as measured by tangible common equity as a percentage of risk weighted assets.

3) Likelihood of government support

Moody's has changed the way it assesses the government's ability to support banks. Nevertheless, ratings for Colombian banks benefit from an average of one notch of uplift due to our assumption of the probability of government support, to reflect the high capacity and demonstrated willingness to support the banking system's stability.

PERUVIAN BANKS

1) Peru's "Moderate +" macro profile

Peruvian banks benefit from strong economic growth in Peru, one of Latin America's fastest growing economies, coupled with solid economic institutions and a forward-looking bank regulatory framework.

A track record of macroeconomic stability, which has allowed authorities to effectively control inflation through monetary policy, as well as market-friendly economic policies, also support the banks' growth potential. Peru's institutional strength has been improving, but is weighed down by corruption and political infighting, particularly at the local level. The country's conservative financial and external debt management protects it from external shocks, and against instability that might be triggered by the financial system's still relatively high dollarization levels.

2) Strong profitability and asset quality, offset by more moderate capitalization

Peruvian banks' BCAs take into account their strong profitability and asset quality, including low problem loan ratios and healthy reserve and capital coverage. The ratings also incorporate the banks' strong deposit funding and liquid resources, which are the result of high regulatory requirements in Peru that have been established in response to the high level of financial dollarization.

The Peruvian banks nevertheless face increased asset quality risk in light of the slowing pace of economic growth in Peru. While regulatory capital ratios are strong, on an adjusted basis they are modest compared to global peers.

3) Likelihood of government support

Moody's ratings for Peruvian banks benefit from an average of one notch of uplift due to our assumption of the probability of government support given its capacity and demonstrated willingness to support system stability. The system's high financial dollarization limits the central bank's capacity to act as a lender of last resort, therefore, we assign support only to systemically important banks.

SPECIFIC ANALYTICAL FACTORS FOR THE BANKS

BANCO DE BOGOTÁ'S BCA, DEPOSIT AND DEBT RATINGS DOWNGRADED; COUNTERPARTY RISK ASSESSMENTS ASSIGNED

DOWNGRADE OF BCA AND SUBORDINATE DEBT RATING

Moody's lowered Banco de Bogotá S.A.'s standalone BCA to baa3, from baa2, and the bank's foreign currency subordinate debt rating to Ba1, from Baa3. The downgrade reflects an increased emphasis placed on capitalization under Moody's new methodology, and a renewed focus on the challenges that arise from Banco de Bogotá's operations in riskier markets outside of Colombia.

The bank's low capitalization according to Moody's methodology, which includes the deduction of the bank's sizable goodwill, compares negatively with regional and global peers, and affects its capacity to absorb losses in the event of stress. At the same time, its presence in riskier countries in Central America may expose Banco de Bogotá's balance sheet to greater volatility in terms of profitability and asset quality, despite a proactive and institutionalized risk management that ensures low levels of problem loans. Ample financial margins and an efficient cost structure, as well as a stable funding base of core deposits also support the baa3 BCA.

The Ba1 foreign currency subordinate debt rating is one notch below Banco de Bogotá's baa3 BCA, following Moody's notching practices for these types of debt instruments.

DOWNGRADE OF LONG-TERM GLOBAL LOCAL CURRENCY DEPOSIT AND FOREIGN CURRENCY SENIOR DEBT RATINGS

Moody's downgraded Banco de Bogotá's long-term GLC deposit and foreign currency senior debt ratings to Baa2, from Baa1. This action was taken in response to a change in the way Moody's assesses the capacity of governments to provide support to banks under the new methodology. We now use the Colombian government's Baa2 bond rating, as the anchor rating to assess the level of government support. Moody's believes that the Colombian government's own bond rating of Baa2 is the appropriate measure of its ability to support banks because it captures the government's fiscal limitations and therefore its ultimate capacity to provide support. Based on insights gained from historic experience in the global markets, Moody's considers that in the case of a prolonged crisis, forbearance and liquidity measures, which were considered in the rating agency's prior assessment of government support, would be insufficient to restore confidence in a banking system, leading to the need for an outright recapitalization of financial entities.

The outlook on Banco de Bogotá's ratings is stable.

WHAT COULD CHANGE THE RATINGS UP/DOWN

The bank's BCA of baa3, and its Ba1 subordinate debt rating, may come under positive pressure in the event its capitalization ratio improves materially. On the other hand, its standalone BCA could come under downward pressure if the bank were to experience asset quality problems that could affect its earnings generation and capital levels. An announcement of another major acquisition would prompt further reassessments of the bank's BCA.

A higher rating for the Colombian government (Baa2 stable) would add upward ratings pressure on the bank's local and foreign currency deposit and senior debt ratings. At the same time, downward ratings pressure on Banco de Bogotá's local and foreign currency deposit ratings and foreign currency senior debt ratings is more limited given Moody's assumption of very high government support.

Moody's assigned long- and short-term CR Assessments of Baa1(cr)/Prime-2(cr) to Banco de Bogotá.

GRUPO AVAL'S ISSUER AND DEBT RATINGS DOWNGRADED

Moody's downgraded Grupo Aval Acciones y Valores S.A.'s (Grupo Aval) long-/short-term global local and foreign currency issuer ratings to Ba1/Not Prime, from Baa3/Prime-3. The rating agency also downgraded to Ba1, from Baa3, Grupo Aval's foreign currency senior debt notes issued through its subsidiary in the Cayman Islands, Grupo Aval Limited. The senior debt ratings are based on Grupo Aval's irrevocable and unconditional guarantee of Grupo Aval Limited's liabilities under the indentures.

Grupo Aval's ratings reflect the structural subordination of the bank holding company's liabilities to the liabilities of its operating subsidiaries, of which Banco de Bogotá is the most relevant. The holding company's issuer and debt ratings of Ba1 are therefore rated one notch below Banco de Bogotá's baa3 BCA to reflect the risk that in a situation of financial or economic stress at the operating bank, Grupo Aval's main source of earnings could be impaired.

Grupo Aval is a bank holding company controlling a diversified, multi-branded group of banks that target different segments of Colombia's and Central America's financial services market. Banco de Bogotá is the main contributor to dividend income. Moody's does not rate any other of Grupo Aval's direct bank subsidiaries.

The outlook on Grupo Aval's ratings is stable. As a holding company, Group Aval is not being assigned a CR Assessment.

BAC'S Baa3 RATINGS AFFIRMED; COUNTERPARTY RISK ASSESSMENTS ASSIGNED

Moody's affirmed BAC International Bank Inc.'s (BAC) baa3 BCA and affirmed its Baa3/Prime-3 deposit ratings with a stable outlook. Moody's also assigned long- and short-term CR Assessments of Baa2(cr)/Prime-2(cr) to BAC. BAC's ratings reflect its performance as a leading regional bank and credit card issuer in Central America. The ratings are supported by the bank's strong profitability and earnings diversification as well as its stable asset quality and capital management. The ratings also take into account the bank's successful integration of its recent acquisitions in Guatemala and Panama, while maintaining relatively stable capitalization and asset quality ratios. The bank's enhanced market positions in two of the region's most important growth markets will in turn strengthen its earnings potential through increased diversification and economies of scale.

BAC's "Weak+" macro profile nevertheless bears significant weight in the assessment of the bank's financial profile. It is a blended profile that derives from the geographic composition of its loan portfolio and captures the relatively weak environment in which BAC operates. While management has a strong track record of shielding the bank from economic and political risks, the bank may become more vulnerable to these risks now that it has a larger presence in markets such as Guatemala, whose macro profile has been lowered to "Weak", from "Weak+."

WHAT COULD CHANGE THE RATINGS UP/DOWN

The BCA could face downward pressure to the extent that conditions in these regional markets deteriorate, or if earnings and capitalization do not improve as expected.

BANCOLOMBIA'S RATINGS AFFIRMED; COUNTERPARTY RISK ASSESSMENTS ASSIGNED

Moody's affirmed Bancolombia S.A.'s baa3 BCA, and affirmed its deposit and senior debt ratings with a stable outlook, reflecting the bank's improving profitability and good asset quality indicators, as it continues to consolidate its 2013 acquisition of Panama's Banistmo. Bancolombia has broad access to core funding in the form of deposits, which offsets the risks associated with the bank's use of market funding and its low liquid assets. The bank's baa3 BCA is constrained by its low capitalization measured against regional and global peers.

WHAT COULD CHANGE THE RATINGS UP/DOWN

Bancolombia's standalone BCA could experience upward pressure if its core capital is strengthened, or if the bank's profitability continues to improve, reversing the declining trend observed during the period of rapid top-line growth that was driven by acquisitions in recent years.

The bank's local and foreign currency deposit ratings of Baa2 already benefit from one notch of uplift due to Moody's assessment of very high government support. Because the Colombian government's rating is also Baa2, upward pressure on Bancolombia's supported ratings is limited.

Bancolombia's ratings would face downward pressure if earnings or capitalization levels weaken, or if the bank undertakes further unfunded acquisitions. Deterioration in asset quality or reserve coverage, stemming from rapid loan growth and an increased appetite for risk, would also lead to downward pressure on the bank's ratings.

Moody's assigned long- and short-term CR Assessments of Baa1(cr)/Prime-2(cr) to Bancolombia.

DAVIVIENDA'S RATINGS AFFIRMED; COUNTERPARTY RISK ASSESSMENTS ASSIGNED

Moody's affirmed Banco Davivienda S.A.'s ba1 BCA and affirmed its deposit and debt ratings with a stable outlook. The rating action incorporates the bank's diversified banking franchise, which is supported by significant retail lending operations, access to core funding, and good asset quality and reserve coverage. Profitability remains strong, but earnings growth has lagged the bank's overall expansion, which has been driven by both organic growth and acquisitions. Davivienda's low capitalization levels are a key rating constraint and limits loss absorption in an eventual situation of stress.

WHAT COULD CHANGE THE RATINGS UP/DOWN

The bank's ratings would face upward pressure if tangible common equity to risk weighted assets were to increase or if asset quality improved. Davivienda's BCA of ba1 could come under negative pressure if the bank's continued high growth leads to a decline in asset quality, or if capitalization or profitability weaken.

Davivienda's local and foreign currency deposit ratings of Baa3 benefit from one notch of uplift from Moody's assessment of high government support, to reflect the bank's importance to Colombia's payments system.

Moody's assigned long- and short-term CR Assessments of Baa2(cr)/Prime-2(cr) to Davivienda.

BBVA COLOMBIA'S RATINGS AFFIRMED; COUNTERPARTY RISK ASSESSMENTS ASSIGNED

Moody's affirmed Banco Bilbao Vizcaya Argentaria Colombia S.A.'s (BBVA Colombia) baa3 BCA and affirmed its deposit and debt ratings with a stable outlook, reflecting the bank's conservative management of its portfolio, low levels of market funding and strong profitability. The bank's ratings are nevertheless constrained by BBVA Colombia's low core capitalization levels when compared to rated peers globally.

WHAT COULD CHANGE THE RATINGS UP/DOWN

BBVA Colombia's standalone BCA of baa3 would experience upward pressure should the bank experience an improvement in capitalization. Stronger profitability or an improvement in funding dynamics driven by an increase in retail deposits would also create upward ratings pressure.

BBVA Colombia's standalone BCA could be lowered if capitalization declines. Downward ratings pressure could also emerge if the bank were to experience asset quality deterioration following years of rapid loan growth.

BBVA Colombia's Baa2 long-term GLC deposit rating derives from the bank's standalone BCA of baa3 and Moody's assessment of high affiliate support, based on Spain's Banco Bilbao Vizcaya Argentaria, S.A.'s (BBVA Spain) standalone BCA of baa2. We also assess a high probability of government support in a situation of stress, because of BBVA Colombia's strong market presence and its significant share of the banking system's total deposits and loans. However, BBVA Colombia's deposit ratings does not benefit from any uplift due to government support because it is already at the same level as the government's bond rating of Baa2.

Moody's assigned long- and short-term CR Assessments of Baa1(cr)/Prime-2(cr) to BBVA Colombia.

GNB'S RATINGS AFFIRMED; COUNTERPARTY RISK ASSESSMENTS ASSIGNED

Moody's affirmed Banco GNB Sudameris S.A.'s (GNB) ba3 BCA and affirmed its deposit and debt ratings with a stable outlook, in line with its historically good asset quality, which is supported by its niche focus on payroll-linked loans and commercial lending, and its high levels of liquid assets. The bank's ratings are constrained by its swift expansion through the acquisitions of HSBC subsidiaries in Colombia, Peru and Paraguay, its low and volatile profitability, and its wholesale funding franchise.

WHAT COULD CHANGE THE RATINGS UP/DOWN

A successful consolidation of the bank's recent franchise expansion would lead to upward pressure on the bank's ba3 standalone BCA. Additionally, an improvement in capitalization would also create positive ratings pressure. Upward pressure on GNB's deposit ratings is limited, given that the bank's local and foreign currency deposit ratings of Ba1 already benefit from two notches of uplift from Moody's assessment of high government support.

The bank's standalone BCA could be revised downwards if the bank engages in further large scale acquisitions that would call into question its ability to consolidate previous acquisitions. This would also lead Moody's to reevaluate its forward looking view of the bank's asset risk and corporate behavior.

Moody's assigned long- and short-term CR Assessments of Ba1(cr)/Not Prime(cr) to GNB.

BCP'S RATINGS AFFIRMED; COUNTERPARTY RISK ASSESSMENTS ASSIGNED

Moody's affirmed the baa2 BCA and Baa1/Prime-2 deposit and senior debt ratings, and Baa3 subordinate debt ratings of Banco de Crédito del Perú (BCP). The Baa1 senior and Baa3 subordinate debt ratings of BCP's Panama branch were also affirmed. The outlook for BCP is stable. The bank's baa2 BCA reflects its strong and growing profitability, its increasingly diverse revenue sources and its operating efficiency. These strengths are aided by the bank's greater emphasis on retail lending, including the recent acquisition of microfinance and small and midsized enterprise lender MiBanco. A key strength of BCP is its superior funding advantage as the largest bank in Peru by far in low cost core deposits, coupled with strong access to longer maturities in both local and global capital markets.

WHAT COULD CHANGE THE RATINGS UP/DOWN

The main risks the bank faces are related to asset quality, in light of slower economic growth in Peru expected in 2015 and 2016, as well as the bank's moderate tangible capitalization relative to similarly rated peers. While BCP has taken significant steps to curb deterioration in its consumer book and rein in the higher problem loans inherited from MiBanco, problem loans could still rise as a result of weaker economic conditions. Should these asset quality problems materialize, capitalization deteriorate or if profitability does not improve as expected, the bank's BCA could face downward pressure.

Moody's assigned A3 (cr)/Prime-2 (cr) long- and short-term CR assessments to BCP and its Panama branch.

SCOTIABANK PERÚ'S RATINGS UPGRADED; COUNTERPARTY RISK ASSESSMENTS ASSIGNED

The upgrade of Scotiabank Perú S.A.A.'s deposit and dated subordinate debt ratings by one notch each to A3 and Baa2, respectively, reflects our revised assessment of the probability of support from the bank's parent, Bank of Nova Scotia (BNS, deposits Aa2/senior unsecured Aa2 negative, BCA a1) to "high" from "moderate." This led to an upgrade in the adjusted BCA to baa1, from baa2. The upgrade also incorporates our assessment that there is a "moderate" probability that the bank would benefit from government support under Moody's joint-default analysis. Scotiabank Perú's baa3 standalone BCA and Prime-2 short term ratings were also affirmed. At the same time, Moody's assigned A3 (cr)/Prime-2 (cr) long- and short-term CR assessments to the bank. The outlook on the bank's ratings is stable.

The bank's baa3 BCA reflects the bank's strong market positioning as Peru's third largest bank, its ample core profitability, above average capitalization, and stable funding and liquidity.

WHAT COULD CHANGE THE RATINGS UP/DOWN

Scotiabank Perú's main risks are related to asset quality, particularly in light of the bank's growing emphasis on consumer and small business lending, and the potential for higher problem loans and credit costs due to Peru's slower economic growth. Should problem loans rise, the related increase in credit costs would reduce the bank's profitability. Nevertheless, Scotiabank Perú's BCA could experience positive pressure if the banks successfully maneuvers the country's economic slowdown without any significant deterioration in asset quality.

INTERBANK'S RATINGS AFFIRMED; COUNTERPARTY RISK ASSESSMENTS ASSIGNED

The baa3 BCA and Baa2/Prime-2 deposit ratings, and Ba1 dated subordinate and Ba3(hyb) junior subordinate debt ratings of Banco Internacional del Perú S.A.A. (Interbank) were also affirmed. The Baa2 senior debt ratings of Interbank's Panama branch were also affirmed, and Moody's assigned Baa1(cr)/Prime-2 (cr) long- and short-term CR assessments to Interbank and its Panama branch. The outlook on the bank's ratings is stable.

Interbank's baa3 BCA reflects its increasing earnings capacity, strong asset quality management, and solid funding and liquidity. As the country's fourth largest bank and second largest consumer lender, its performance also benefits from strong access to core retail deposit funding through its extensive distribution network.

WHAT COULD CHANGE THE RATINGS UP/DOWN

The key risks that Interbank faces are related to asset quality, given its large consumer lending business, particularly in credit cards, and its moderate tangible capitalization relative to similarly rated peers. Higher problem loans could lead to increased credit costs that could negatively affect profitability. The bank's ample reserve coverage and a shift towards higher quality commercial and consumer lending nevertheless protects the balance sheet against asset quality surprises. The bank's BCA is well positioned at the baa3 level.

List of All of the Affected Ratings:

Banco de Bogotá S.A.

- Long-term global local currency deposit rating: Downgrade to Baa2, from Baa1, stable outlook

- Short-term global local currency deposit rating: Affirm at Prime-2

- Long-term foreign currency deposit rating: Affirm at Baa2, stable outlook

- Short-term foreign currency deposit rating: Affirm at Prime-2

- Long-term foreign currency senior unsecured debt rating: Downgrade to Baa2, from Baa1, stable outlook

- Long-term foreign currency subordinate debt rating: Downgrade to Ba1, from Baa3

- Baseline credit assessment: Downgraded to baa3, from baa2

- Adjusted baseline credit assessment: Downgraded to baa3, from baa2

- Long-term counterparty risk assessment: Assigned at Baa1(cr)

- Short-term counterparty risk assessment: Assigned at Prime-2(cr)

- Outlook: Stable

Grupo Aval Acciones y Valores S.A.

- Long-term global local currency issuer rating: Downgrade to Ba1, from Baa3, stable outlook

- Short-term global local currency issuer rating: Downgrade to Not Prime, from Prime-3

- Long-term foreign currency issuer rating: Downgrade to Ba1, from Baa3, stable outlook

- Short-term foreign currency issuer rating: Downgrade to Not Prime, from Prime-3

- Outlook: Stable

Grupo Aval Limited

- Backed long-term foreign currency senior debt rating: Downgrade to Ba1, from Baa3, stable outlook

- Outlook: Stable

BAC International Bank, Inc.

- Long-term global local currency deposit rating: Affirm at Baa3, stable outlook

- Short-term global local currency deposit rating: Affirm at Prime-3

- Long-term foreign currency deposit rating: Affirm at Baa3, stable outlook

- Short-term foreign currency deposit rating: Affirm at Prime-3

- Baseline credit assessment: Affirm at baa3

- Adjusted baseline credit assessment: Affirm at baa3

- Long-term counterparty risk assessment: Assigned at Baa2(cr)

- Short-term counterparty risk assessment: Assigned at Prime-2(cr)

- Outlook: Stable

Bancolombia S.A.

- Long-term global local currency deposit rating: Affirm at Baa2, stable outlook

- Short-term global local currency deposit rating: Affirm at Prime-2

- Long-term foreign currency deposit rating: Affirm at Baa2, stable outlook

- Short-term foreign currency deposit rating: Affirm at Prime-2

- Long-term foreign currency senior unsecured debt rating: Affirm at Baa2, stable outlook

- Long-term foreign currency subordinate debt rating: Affirm at Ba1

- Baseline credit assessment: Affirm at baa3

- Adjusted baseline credit assessment: Affirm at baa3

- Long-term counterparty risk assessment: Assigned at Baa1(cr)

- Short-term counterparty risk assessment: Assigned at Prime-2(cr)

- Outlook: Stable

Banco Davivienda S.A.

- Long-term global local currency deposit rating: Affirm at Baa3, stable outlook

- Short-term global local currency deposit rating: Affirm at Prime-3

- Long-term foreign currency deposit rating: Affirm at Baa3, stable outlook

- Short-term foreign currency deposit rating: Affirm at Prime-3

- Long-term foreign currency senior unsecured debt rating: Affirm at Baa3, stable outlook

- Long-term foreign currency subordinate debt rating: Affirm at Ba2

- Baseline credit assessment: Affirm at ba1

- Adjusted baseline credit assessment: Affirm at ba1

- Long-term counterparty risk assessment: Assigned at Baa2(cr)

- Short-term counterparty risk assessment: Assigned at Prime-2(cr)

- Outlook: Stable

Banco Bilbao Vizcaya Argentaria Colombia S.A.

- Long-term global local currency deposit rating: Affirm at Baa2, stable outlook

- Short-term global local currency deposit rating: Affirm at Prime-2

- Long-term foreign currency deposit rating: Affirm at Baa2, stable outlook

- Short-term foreign currency deposit rating: Affirm at Prime-2

- Long-term foreign currency subordinate debt rating: Affirm at Baa3

- Baseline credit assessment: Affirm at baa3

- Adjusted baseline credit assessment: Affirm at baa2

- Long-term counterparty risk assessment: Assigned at Baa1(cr)

- Short-term counterparty risk assessment: Assigned at Prime-2(cr)

- Outlook: Stable

Banco GNB Sudameris S.A.

- Long-term global local currency deposit rating: Affirm at Ba1, stable outlook

- Short-term global local currency deposit rating: Affirm at Not Prime

- Long-term foreign currency deposit rating: Affirm at Ba1, stable outlook

- Short-term foreign currency deposit rating: Affirm at Not Prime

- Long-term foreign currency senior unsecured debt rating: Affirm at Ba1, stable outlook

- Long-term foreign currency subordinate debt rating: Affirm at B1

- Baseline credit assessment: Affirm at ba3

- Adjusted baseline credit assessment: Affirm at ba3

- Long-term counterparty risk assessment: Assigned at Ba1(cr)

- Short-term counterparty risk assessment: Assigned at Not Prime(cr)

- Outlook: Stable

Banco de Crédito del Perú

- Long-term global local currency deposit rating: Affirm at Baa1, stable outlook

- Short-term global local currency deposit rating: Affirm at Prime-2

- Long-term foreign currency deposit rating: Affirm at Baa1, stable outlook

- Short-term foreign currency deposit rating: Affirm at Prime-2

- Long-term foreign currency senior unsecured debt rating: Affirm at Baa1, stable outlook

- Long-term local currency subordinate debt rating: Affirm at Baa3

- Baseline credit assessment: Affirm at baa2

- Adjusted baseline credit assessment: Affirm at baa2

- Long-term counterparty risk assessment: Assigned at A3(cr)

- Short-term counterparty risk assessment: Assigned at Prime-2(cr)

- Outlook: Stable

Banco de Crédito del Perú, Panama Branch

- Long-term foreign currency senior unsecured debt rating: Affirm at Baa1, stable outlook

- Long-term foreign currency subordinate debt rating: Affirm at Baa3

- Long-term counterparty risk assessment: Assigned at A3(cr)

- Short-term counterparty risk assessment: Assigned at Prime-2(cr)

- Outlook: Stable

Scotiabank Perú S.A.A.

- Long-term global local currency deposit rating: Upgrade to A3, from Baa1, stable outlook

- Short-term global local currency deposit rating: Affirm at Prime-2

- Long-term foreign currency deposit rating: Upgrade to A3, from Baa1, stable outlook

- Short-term foreign currency deposit rating: Affirm at Prime-2

- Long-term foreign currency subordinate debt rating: Upgrade to Baa2, from Baa3

- Baseline credit assessment: Affirm at baa3

- Adjusted baseline credit assessment: Upgrade to baa1, from baa2

- Long-term counterparty risk assessment: Assigned at A3(cr)

- Short-term counterparty risk assessment: Assigned at Prime-2(cr)

- Outlook: Stable

Banco Internacional del Perú S.A.A. -- Interbank

- Long-term global local currency deposit rating: Affirm at Baa2, stable outlook

- Short-term global local currency deposit rating: Affirm at Prime-2

- Long-term foreign currency deposit rating: Affirm at Baa2, stable outlook

- Short-term foreign currency deposit rating: Affirm at Prime-2

- Long-term foreign currency subordinate debt rating: Affirm at Ba1

- Backed long-term foreign currency junior subordinate debt rating: Affirm at Ba3(hyb)

- Baseline credit assessment: Affirm at baa3

- Adjusted baseline credit assessment: Affirm at baa3

- Long-term counterparty risk assessment: Assigned at Baa1(cr)

- Short-term counterparty risk assessment: Assigned at Prime-2(cr)

- Outlook: Stable

Banco Internacional del Perú (Panama Branch)

- Long-term foreign currency senior unsecured debt rating: Affirm at Baa2, stable outlook

- Long-term counterparty risk assessment: Assigned at Baa1(cr)

- Short-term counterparty risk assessment: Assigned at Prime-2(cr)

- Outlook: Stable

Last rating actions

The last rating action on Banco de Bogotá was on 17 March 2015, when the bank's BCA, long-term global local currency deposit rating, long-term foreign currency senior unsecured debt rating and long-term foreign currency subordinate debt rating were placed on review for downgrade.

The last rating action on Grupo Aval and Grupo Aval Limited was on 17 March 2015, when the group's issuer and debt ratings were placed on review for downgrade.

The last rating action on BAC was on 26 July 2013, when Moody's affirmed all of the bank's ratings with a stable outlook.

The last rating action on Bancolombia was on 29 July 2014, when the bank's foreign currency ratings were upgraded and the outlook on its global local currency deposit ratings changed to stable, from negative.

The last rating action on Davivienda was on 12 July 2013, when Moody's affirmed all of the bank's ratings and changed the bank's outlook to stable, from negative.

The last rating action on BBVA Colombia was on 8 April 2015, when Moody's rated its proposed foreign currency subordinate debt issuance.

The last rating action on GNB was on 15 October 2014, when Moody's changed to positive the outlook of the bank's financial strength rating and affirmed all ratings.

The last rating action on BCP was on 3 July 2014, when Moody's upgraded the bank's local and foreign currency deposit ratings and foreign currency senior unsecured debt rating.

The last rating action on BCP Panama Branch was on 3 July 2014, when Moody's upgraded the branch's foreign currency senior unsecured debt rating.

The last rating action on Interbank was on 3 July 2014, when Moody's upgraded the bank's local and foreign currency deposit ratings.

The last rating action on Interbank Panama Branch was on 3 July 2014, when Moody's upgraded the branch's foreign currency senior unsecured debt rating.

The last rating action on Scotiabank Perú was on 3 July 2014, when Moody's upgraded the bank's long-term local and foreign currency deposit ratings.

The principal methodology used in these ratings was Banks published in March 2015. Please see the Credit Policy page on www.moodys.com for a copy of this methodology.

Banco de Bogotá is headquartered in Bogotá, Distrito Capital, Colombia. As of year-end 2014, the bank reported USD49.7 billion (COP118.4 trillion) in assets.

Grupo Aval is headquartered in Bogotá, Distrito Capital, Colombia. As of year-end 2014, the group reported USD74.2 billion (COP176.3 trillion) in consolidated assets.

BAC is headquartered in Panama City, Panama. As of year-end 2014, the bank reported USD17.4 billion in assets.

Bancolombia is headquartered in Medellín, Antioquia, Colombia. As of year-end 2014, the bank reported USD62.6 billion (COP148.7 trillion) in assets.

Davivienda is headquartered in Bogotá, Distrito Capital, Colombia. As of year-end 2014, the bank reported USD28.4 billion (COP67.5 trillion) in assets.

BBVA Colombia is headquartered in Bogotá, Distrito Capital, Colombia. As of year-end 2014, the bank reported USD17.5 billion (COP41.5 trillion) in assets.

GNB is headquartered in Bogotá, Distrito Capital, Colombia. As of year-end 2014, the bank reported USD9.3 billion (COP22.1 trillion) in assets.

BCP is headquartered in Lima, Peru. As of year-end 2014, the bank reported USD38.9 billion (PEN115.7 billion) in assets.

Scotiabank Perú is headquartered in Lima, Peru. As of year-end 2014, the bank reported USD15.8 billion (PEN47.0 billion) in assets.

Interbank is headquartered in Lima, Peru. As of year-end 2014, the bank reported USD11.1 billion (PEN33.1 billion) in assets.

REGULATORY DISCLOSURES

For ratings issued on a program, series or category/class of debt, this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series or category/class of debt or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides certain regulatory disclosures in relation to the rating action on the support provider and in relation to each particular rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides certain regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.

For any affected securities or rated entities receiving direct credit support from the primary entity(ies) of this rating action, and whose ratings may change as a result of this rating action, the associated regulatory disclosures will be those of the guarantor entity. Exceptions to this approach exist for the following disclosures, if applicable to jurisdiction: Ancillary Services, Disclosure to rated entity, Disclosure from rated entity.

The below contact information is provided for information purposes only. Please see the ratings tab of the issuer page at www.moodys.com, for each of the ratings covered, Moody's disclosures on the lead analyst and the Moody's legal entity that has issued the ratings.

Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or rating review.

Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.

Please see the ratings tab on the issuer/entity page on www.moodys.com for additional regulatory disclosures for each credit rating.

Jeanne Del Casino
VP - Senior Credit Officer
Financial Institutions Group
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

M. Celina Vansetti
MD - Banking
Financial Institutions Group
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Releasing Office:
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Moody's takes rating actions on banks in Colombia and Peru
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