Moody's on Aug. 2 revised its outlook on 12 Bolivian banks to stable from negative, following a similar action on the Bolivian sovereign's government bond rating.
The affected banks were Banco BISA SA, Banco Económico SA, Banco Ganadero SA, Banco Nacional de Bolivia SA, Banco Mercantil Santa Cruz SA, Banco Unión SA, Banco de Crédito de Bolivia SA, Banco Solidario SA, Banco Fassil SA, Banco para el Fomento a Iniciativas Económicas SA, Banco do Brasil SA (Bolivia), and Banco de Desarrollo Productivo SAM.
All the banks' ratings and baseline credit assessments were affirmed, reflecting the strength of the companies despite pressures of complying with stricter government regulation, such as interest rate caps, and mandated lending requirements wherein 60% of banks' loan portfolios must be set aside for priority economic sectors.
Moody's added the banks' capitalization remains more than sufficient to absorb expected losses, despite the possibility of higher asset risks and lower profitability amid the requirements. They also exhibit sufficient liquidity levels.