Fitch Ratings on May 11 affirmed Banco Interamericano de Finanzas SA's BBB- long-term foreign and local currency issuer default ratings but revised the outlook to negative from stable.
The negative outlook, Fitch said, reflects concerns on the continued deterioration of the bank's performance and asset quality, both of which are further pressuring its already tight capitalization levels and relatively limited loss absorbing capacity.
Banco Interamericano de Finanzas, known as BanBif, is Peru's fifth-largest bank, with a roughly 4% market share by loans and deposits. However, Fitch considers the bank's capitalization to be weak after years of growing loans faster than its internal capacity generation.
In addition, the bank's declining profitability limits its flexibility to generate internal capital and maintain a sound reserves cushion.
The bank's asset quality significantly deteriorated in 2017, increasing to 2.9% in 2017 from 2.3% in 2016, mainly due to a slowdown in its commercial portfolio.