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Banco Ficohsa Guatemala nets Fitch upgrade on better financial performance

Fitch Ratings on June 7 raised its long-term national scale rating on Banco Ficohsa Guatemala SA to BB(gtm) from BB-(gtm), with a stable outlook, while affirming the bank's short-term national rating at B(gtm).

The upgrade of the long-term rating reflects improvements in the bank's financial performance, including a positive trend in net profits and lower operating losses.

The company's ratings are based on its intrinsic financial profile, Fitch said, adding that it benefits from the operational support and know-how provided by parent company Grupo Financiero Ficohsa SA.

Banco Ficohsa Guatemala's risk-management tools "stand out from those" used by similarly-sized peers in Guatemala's banking sector, the rating agency said. Although the bank's delinquency rate remained high in 2017, Fitch believes the company can reverse that position by diversifying its loan portfolio to lower-risk segments, a strategy the bank has already set in motion.

Banco Ficohsa Guatemala focuses on the credit card segment, which represented around 75% and 69% of its revenues and loan portfolio, respectively, at the end of 2017.