Fitch Ratings on June 5 affirmed Costa Rica-based Cooperativa de Ahorro y Crédito Ande No.1 R.L.'s, or Coopeande, long and short-term national ratings at AA-(cri) and F1+(cri), respectively, and revised the outlook to stable from negative.
The ratings on Coopeande reflect its high-risk portfolio appetite, robust heritage and a portfolio deterioration that is still reasonable and stabilized. The Costa Rican company also has a focused business model and limited franchise in the country's financial system.
The company has good liquidity levels, with liquid assets and securities representing 29.0% of total assets and 43.35% of covered deposits. It also has moderate profitability, with indicators significantly decreasing in recent years, though Fitch believes profitability in 2017 will improve from 2016.
Fitch adds Coopeande's impairment indicators stabilized somewhat in 2016. This follows significant increases in 2015 in nonperforming loans due to the over-indebtedness of its parent, similar to the rest of the cooperative market. Nonperforming loans over 90 days past due have been higher than the historical average, but are also consistent with the cooperative segment.
The outlook revision reflects Fitch's belief the company's rating fundamentals will be unchanged across the foreseeable future. Fitch notes these may be downgraded in case of a sharp increase in portfolio delinquency levels leads to levels higher than peers.
The rating agency recently affirmed Costa Rica's Caja de Ahorro y Préstamos de la Asociación Nacional de Educadores.