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Fitch withdraws ratings on Financiera de Occidente after regulatory intervention


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Fitch withdraws ratings on Financiera de Occidente after regulatory intervention

Fitch Ratings on Dec. 17 lowered and withdrew its ratings on Guatemalan bank Financiera de Occidente SA and affiliate Tarjetas de Crédito de Occidente SA after the former's operations were suspended by regulators.

Prior to the withdrawal, Fitch cut Financiera de Occidente's national long-term rating to C(gtm) from B-(gtm) and lowered the same rating on Tarjetas de Crédito to C(gtm) from B(gtm). The outlook was negative at the time of withdrawal.

The rating agency also cut its national short-term ratings on both entities to C(gtm) from B(gtm) before withdrawing them. The withdrawals were due to commercial reasons, Fitch said, adding that it will no longer have enough information to properly rate the companies.

At the request of the SIB banking regulator, Guatemala's central bank suspended Financiera de Occidente's operations earlier in December, with SIB chief Érick Vargas Sierra saying management practices at the institution put its solvency at risk.

According to Fitch, the company's suspension and exit from the local banking system will hamper its ability to meet financial obligations and will pose similar problems for Tarjetas de Crédito.