Fitch Ratings on Sept. 2 downgraded Financiera Finca Nicaragua SA's long-term national scale ratings to B(nic) from BB(nic), maintaining a negative outlook.
The downgrade reflects a "sustained and marked deterioration of the entity's financial profile" as a result of wider losses, and an increase in past-due loans, among other factors, the rating agency said.
The company could face pressure on its liquidity indicators in the short term due to issues related to traditional funding sources, Fitch said, adding that the firm's profitability has suffered due to higher credit provisions and lower demand for credit in Nicaragua.
Loans more than 90 days past due represented 11.44% of Financiera Finca's total credit portfolio as of June, Fitch noted.
The rating agency affirmed the lender's national short-term ratings at B(nic).
