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Fitch places Banco ProCredit on Rating Watch Negative following acquisition

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Fitch places Banco ProCredit on Rating Watch Negative following acquisition

Fitch Ratings on Aug. 10 placed the AA+(nic) long- and F1+(nic) short-term national ratings of Nicaragua-based Banco ProCredit SA on Rating Watch Negative following the announcement of the acquisition of the company by Corporación Financiera de Inversiones.

On Aug. 2, Corporación Financiera de Inversiones completed the purchase of Banco ProCredit from ProCredit Holding AG & Co. KGaA and Doen Foundation. The transaction was approved by the Nicaraguan regulator.

"After closing the transaction and becoming the property of the new shareholder, [Banco] ProCredit stopped counting on the [ProCredit Holding] support, which was the basis of the ratings," Fitch said.

The Negative Watch placement reflects the most likely direction of the ratings once the process of evaluating Banco ProCredit's intrinsic financial profile is completed in light of the incorporation of its new shareholders, the rating agency added.

Meanwhile, Banco ProCredit's intrinsic profile considers its current business model, oriented to the SME segment, and its small participation in the Nicaraguan market. It also considers good levels of portfolio quality as well as moderate profitability and capitalization.