S&P Global Ratings on Aug. 4 affirmed the ratings of nine Chilean financial institutions but assigned negative outlooks to the institutions.
With the action, the rating agency removed the entities from CreditWatch negative.
The affected financial institutions include Banco Santander Chile, Banco de Credito e Inversiones SA, Itaú CorpBanca, Banco BICE, Banco Bilbao Vizcaya Argentaria Chile SA, Banco Security SA, Cooperativa del Personal de la Universidad de Chile Ltda., Tanner Servicios Financieros SA and LQ Inversiones Financieras SA.
The ratings actions reflect a higher risk of economic imbalances due to the modest rise in Chile's exposure to external shocks, which will be balanced by a slowdown in credit growth and real estate prices, S&P said.
S&P maintained the economic risk trend of its banking industry country risk assessment, or BICRA, on negative and the BICRA score on Chile at group 3. The economic risk assessment within BICRA is 4 while the industry risk assessment is 3.
"The negative outlook on the entities reflects our view that there is at least a one–in–three chance that we could downgrade them if lending growth and property prices stop decelerating, leading to pressures on economic imbalances, given Chile's already weakened external position," the rating agency added.
S&P Global Ratings and S&P Global Market Intelligence are owned by S&P Global Inc.