Fitch Ratingson April 28 placed the international ratings of Banco de Bogotá SA and Grupo Aval Acciones y Valores S.A. on Rating Watch Negative.
The issuer defaultratings of the companies' related entities, including Corporacion Financiera Colombiana SA (Panama) and , werealso placed on Rating Watch Negative.
The ratingsaction follows the release of Banco de Bogotá's financial reports showing lower-than-expectedcapital metrics, Fitch said.
The placementindicates a possible downgrade of Banco de Bogotá's ratings once Fitch completesits review of the bank's capital adequacy metrics, which were hit by a significantdepreciation of the local currency.
The declinein the bank's capital ratios was driven by changes in the accounting standards andthe currency depreciation, given its sizeable assets abroad, Fitch noted.
However, thebank could rebuild its capital ratios through plans of slower growth and sustainedinternal capital generation amid a stable economic environment and less volatileexchange rates, Fitch said. The bank's management and holding company are also workingon a capital plan to aid the bank's capital buffers, the agency noted.
Meanwhile, GrupoAval's ratings reflect the business and financial profile of its subsidiaries, particularlyBanco de Bogotá's, although they also consider the group's moderate leverage andadequate cash flow metrics, Fitch said.