Fitch Ratings on March 28 affirmed Costa Rica's Banco Popular y de Desarrollo Comunal SA's long-term foreign and local currency issuer default ratings at BB, with a stable outlook.
The Costa Rican bank's short-term foreign and local currency issuer default ratings were also affirmed at B, while its viability rating was affirmed at "bb."
Fitch said the issuer default and national ratings reflect the bank's intrinsic creditworthiness, while the issuer default and viability ratings reflect the high influence of the operating environment, public nature of the bank and benefits granted by the law.
They also incorporate the bank's ample loss-absorption capacity, good profitability, adequate asset stability, and stable deposit-based funding. The funding structure saw healthy growth in 2016, though Fitch noted it is less flexible than local peers, some of which have access to correspondent banks' funding and/or international debt issuances.
Fitch added the bank's delinquency ratio of loans 90 days past-due is 2.3%, which is gradually shrinking and is also higher than the Costa Rican financial system average.
Meanwhile, the bank has a support rating of 3 and support rating floor of BB-, which reflect a moderate probability of support from Costa Rica.