FitchRatings said April 8 that it has maintained its negative outlook on 's national ratings after Grupo Terra's announcement in December2015 that it will buy CitigroupInc.'s consumer and commercial banking operations in the country.
CitiEl Salvador's long- and short-term national ratings are AAA(slv) and F1(slv),respectively. The ratings still reflect the potential support from Citigroup,Fitch noted. However, the negative outlook means the bank'sratings could be lowered after Grupo Terra takes control and it loses thesupport of Citigroup, Fitch said.
GrupoTerra signed an agreement in December 2015 to purchase a controllingstake in Banco Citibank de El Salvador, as well as other local Citi units.
Meanwhile,El Salvador's low economic growth and strong competition among banks isexpected to continue to pressure Citi El Salvador's performance, Fitch said.
Althoughthe bank's robust capitalization continues to give it the capacity to absorbpotential losses, the bank's profitability is weak due to high expenses onprovisions and low operating efficiency, Fitch said.
Inaddition, the quality of its assets compares negatively to its peers due to thecontraction of its loan portfolio and high delinquency rate, Fitch noted.