Fitch Ratings on Jan. 27 lowered the ratings of several Costa Rican banks in the wake of its downgrade of the Latin American country earlier in the month.
The rating agency lowered the long-term issuer default ratings on: Banco BAC San José SA, Banco Davivienda (Costa Rica) SA, Banco de Costa Rica, Banco Internacional de Costa Rica SA, Banco Nacional de Costa Rica and Banco Popular y de Desarrollo Comunal SA.
Fitch also downgraded the viability ratings of Banco BAC San José, Banco de Costa Rica, Banco Nacional de Costa Rica and Banco Popular y de Desarrollo Comunal, bringing them in line with Costa Rica's own rating, which Fitch said reflects the "high influence of the sovereign and the local operating environment over the financial sector and the credit profiles of these banks."
The move came little more than a week after Fitch downgraded Costa Rica's long-term foreign and local currency issuer default ratings to BB from BB+, while revising the outlook to stable from negative.
In making that downgrade, Fitch pointed to Costa Rica's "deteriorating debt dynamics," noting that the central government's fiscal deficits grew to some 5.7% of GDP in 2015. The deficit is still expected to rise further in the coming years due to higher interest rates and spending.