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Fitch assigns ratings to Banco de Fomento

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Fitch assigns ratings to Banco de Fomento

Fitch Ratings on March 21 assigned to Banco de Fomento a la Producción national long and short-term ratings of AA-(nic) and F1+(nic), respectively, with a stable outlook.

The bank's ratings incorporate the support it receives from its owner, the Republic of Nicaragua, through the Ministry of Finance and Public Credit. Fitch notes that the state will not serve as a guarantor of the bank's obligations, but believes the bank's credit profile is still favorable due to its links with the state, and it could receive support if needed.

Additionally, the bank has a high ability to absorb losses, based on solid capitalization and good profitability. As of September 2017, loans with maturity of over 90 days only represented 0.1% of Banco de Fomento's portfolio, and operating income to risk-weighted assets was 9.8%.