Fitch Ratings on Jan. 15 revised its outlook on Banco de la Producción SA and Banco Pichincha C.A.'s ratings to negative from stable, following a similar outlook revision on Ecuador this month.
The rating agency said that the environment in which both banks are operating hampers their growth potential, profitability and internal capital-generation capacity. Fitch adds that "direct exposure to Ecuador through investment portfolios, constrain the banks' ratings to the sovereign's creditworthiness."
Fitch lowered its outlook on Ecuador to negative from stable as it warned against the country's relatively large financing needs and uncertain access to funding sources.
Meanwhile, the rating agency also affirmed the long- and short-term foreign currency issuer default ratings of both of the banks at B- and B, respectively. Their viability ratings were both affirmed at "b-" while their support ratings were affirmed at 5.