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Fitch affirms ratings of CorpBanca Colombia; outlook stable

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Fitch affirms ratings of CorpBanca Colombia; outlook stable

FitchRatings on April 11 affirmed the long-term national rating of Banco CorpBanca Colombia SA at AAA(col) with a stable outlook.It also affirmed its short-term national rating at F1+(col).

The ratingscontinue to reflect the bank's good market position, sustained credit growth, diversificationof income and stable deposit base, Fitch said. The bank's low appetite for riskand level of capitalization was also considered.

Aftercompleting its mergerwith Helm Bank SA in 2014,CorpBanca Colombia has maintained the quality of its loan portfolio thanks to itslow delinquency rate and better than average reserves coverage, Fitch said.

Fitchsaid the bank's conservative policies and risk controls, aligned with best practicesand requirements of its parent company, Chile's Itaú CorpBanca, should help it maintain the quality of itsassets.

CorpBancaColombia's profitability in 2015 was limited by operating costs related to the HelmBank merger, but its profitability should increase as it grows its business andtakes advantage of synergies created by the merger, Fitch said.

Capitalinjections related to the merger and its commitment not to pay dividends in thefirst few years as a merged entity have been positive for the bank's operations,Fitch said, adding it expects efforts to boost profitability should increase internalcapital generation and allow the firm to maintain capital levels in line with itsrisk profile.

Fitchalso noted that the merger between CorpBanca and Banco Itaú Chile, which was completed April 1 to create ItaúCorpBanca, could bring additional benefits for the Colombian unit, including theadoption of best practices used by the two banks in other countries.