Fitch Ratings on April 7 acted on cooperative banking group Grupo Cooperativo Cajamar; its central bank, Banco de Crédito Social Cooperativo SA; and its largest cooperative bank, Cajamar Caja Rural SCC.
Fitch affirmed the BB-/B long- and short-term issuer default ratings of all three banks and revised the outlooks on the long-term ratings to positive from stable.
The rating agency also affirmed the "bb-" viability rating of Grupo Cooperativo Cajamar, which is not a legal entity. Its 19 credit cooperatives and Banco de Crédito Social are bound by a mutual support mechanism, under which members mutualize 100% of profits and have a cross-support mechanism for capital and liquidity.
Grupo Cooperativo Cajamar's issuer default ratings and its viability rating reflect the group's "poor" asset quality, its capital vulnerability to unreserved problem assets, its adequate funding and liquidity profile, and the challenge to improve its core banking profitability.
The positive outlook reflects the agency's expectation that the group's problem asset volume will continue to decline, which will reduce capital vulnerability to unreserved problem assets.