Fitch Affirms Banco de Costa Rica at ‘BB-‘

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By LatAm Reports Editor

The US risk rating agency Fitch Ratings reaffirmed the long- and short-term national ratings of the National Bank of Costa Rica (BN), which means that the international agency confirms the solidity and financial solvency of the largest bank in the country.

The director of Institutional Relations of the BN, María Brenes, said that the fact that the Fitch Ratings agency reaffirms the solidity and solvency of the BN, is a sign of confidence for all our clients, who allowed us to support them through the placement of credits in 2023, each loan translates into projects, companies, businesses, homes and dreams in different corners of Costa Rica.

At the end of the previous year, the BN was the bank of the local market with the highest growth in its credit portfolio, which means that people trust the institution as it has for 110 years, he added.

Why did Fitch reaffirm the BN’s rating?

  • Local systemic importance: the BN is the largest bank in Costa Rica, with a market share of 25.5% as of December 2023. In the case of credits and deposits, the share reported at the end of the previous year was 27.4%. It has a well-developed and diversified business model at the economic sector level, which resulted in an average total operating income of $564 million during the period 2019 to 2022, which, in addition, have shown an upward trend, Fitch acknowledged in a statement issued on Monday, February 12.
  • Credit quality: the quality of the credits granted continues at appropriate levels with data that support the financial strength of the BN. It is important to indicate, for example, that at the end of 2023 only two banks in Costa Rica increased their credit portfolio, the BN was the one that recorded the highest growth with 6.5 per cent.
  • Financial solidity: The rating agency acknowledges that the BN has stable profitability prospects, and also has a solid capitalization and anchoring structure.
  • Case under investigation: on the case under investigation in judicial instances, the agency was of the opinion that the framework of control of this risk has been strengthened in recent months in response to the event. Fitch does not expect relevant effects on the financial profile of the entity derived from this event, he added in the statement.

What are risk qualifiers?

Risk rating agencies or rating agencies conduct international financial research and analysis of commercial and government entities.

They are dedicated to classifying the risks of investments of different financial products, including sovereign debts. The three companies on global sovereign debt risk rating are Moodys, Standard & Poor’s and Fitch Ratings.

It should be noted that in August 2023 the agency Fitch Ratings granted positive risk ratings to BN, highlighting six strengths: its financial performance, asset quality, risk management, strong business profile and market leadership, as it is the largest entity in the national banking system, the growth of capitalization and the strong anchoring structure.

In November 2023, the agency Moodys also improved the rating of the BN.

Fitch Affirms Banco de Costa Rica at ‘BB-‘

The US risk rating agency Fitch Ratings reaffirmed the long- and short-term national ratings of the National Bank of Costa Rica (BN), which means that the international agency confirms the solidity and financial solvency of the largest bank in the country.

The director of Institutional Relations of the BN, María Brenes, said that the fact that the Fitch Ratings agency reaffirms the solidity and solvency of the BN, is a sign of confidence for all our clients, who allowed us to support them through the placement of credits in 2023, each loan translates into projects, companies, businesses, homes and dreams in different corners of Costa Rica.

At the end of the previous year, the BN was the bank of the local market with the highest growth in its credit portfolio, which means that people trust the institution as it has for 110 years, he added.

Why did Fitch reaffirm the BN’s rating?

  • Local systemic importance: the BN is the largest bank in Costa Rica, with a market share of 25.5% as of December 2023. In the case of credits and deposits, the share reported at the end of the previous year was 27.4%. It has a well-developed and diversified business model at the economic sector level, which resulted in an average total operating income of $564 million during the period 2019 to 2022, which, in addition, have shown an upward trend, Fitch acknowledged in a statement issued on Monday, February 12.
  • Credit quality: the quality of the credits granted continues at appropriate levels with data that support the financial strength of the BN. It is important to indicate, for example, that at the end of 2023 only two banks in Costa Rica increased their credit portfolio, the BN was the one that recorded the highest growth with 6.5 per cent.
  • Financial solidity: The rating agency acknowledges that the BN has stable profitability prospects, and also has a solid capitalization and anchoring structure.
  • Case under investigation: on the case under investigation in judicial instances, the agency was of the opinion that the framework of control of this risk has been strengthened in recent months in response to the event. Fitch does not expect relevant effects on the financial profile of the entity derived from this event, he added in the statement.

What are risk qualifiers?

Risk rating agencies or rating agencies conduct international financial research and analysis of commercial and government entities.

They are dedicated to classifying the risks of investments of different financial products, including sovereign debts. The three companies on global sovereign debt risk rating are Moodys, Standard & Poor’s and Fitch Ratings.

It should be noted that in August 2023 the agency Fitch Ratings granted positive risk ratings to BN, highlighting six strengths: its financial performance, asset quality, risk management, strong business profile and market leadership, as it is the largest entity in the national banking system, the growth of capitalization and the strong anchoring structure.

In November 2023, the agency Moodys also improved the rating of the BN.

This article has been translated from the original which first appeared in El Mundo