Fitch Ratings on Dec. 13 downgraded the long-term national ratings of Mercantil CA Banco Universal to A+(ven) from AA-(ven) due to its high exposure to Venezuela's volatile operating environment.
Fitch also downgraded the bank's short-term national ratings to F1(ven) from F1+(ven). Meanwhile, the bank's affirmed ratings include its long- and short-term foreign and local currency issuer default ratings at CCC and C, respectively; viability rating at "ccc"; and support rating at 5.
"Similar to other commercial banks operating in emerging markets in highly speculative rating categories, the operating environment highly influences Mercantil's ratings," Fitch said. The ratings are constrained by the sovereign's creditworthiness as well as the vulnerability of the government's economic and regulatory policies.
Fitch also noted that Mercantil's capitalization has been pressured as asset growth has exceeded internal capital generation over the previous years.