Fitch Ratings on May 28 downgraded the long-term national rating of Nicaragua's Banco de Finanzas SA to AA+(nic) from AAA(nic), while affirming the short-term rating at F1+(nic.)
Fitch said the BDF downgrade reflects the higher transfer and convertibility risks brought about by the deteriorating operating environment in the sovereign. The outlook on the long-term rating remains negative, due to general macroeconomic factors in Nicaragua.
The bank does benefit from support that Fitch believes would be forthcoming from ultimate parent Grupo ASSA, but Fitch added that increased country risk due to deterioration of the operating environment could affect banks, and could limit both BDF's access to support from Grupo ASSA, and the latter's ability to provide it as needed.
Fitch last affirmed the bank's long-term national ratings at AAA(nic) in November 2018, while removing its rating from negative watch. Earlier in 2018, the rating agency downgraded Nicaragua and revised the outlook to negative over increased political instability.