Fitch affirms Banco de Costa Rica

Fitch Ratings said it affirmed Banco de Costa Rica, SA's long-term foreign-currency issuer default rating at BB, long-term local-currency issuer default rating at BB+, short-term foreign- and local-currency issuer default ratings at B, national-scale long-term rating at AA+(cri), national-scale short-term rating at F1+(cri), long-term national-scale rating for local senior debt issues at AA+(cri) and short-term national-scale rating for local senior debt issues at F1+(cri).

The outlook is stable.

The agency said the bank's ratings reflect its strong franchise, adequate capital levels, sound funding and liquidity and the support and guarantee provided by its sole shareholder, Costa Rica (long-term foreign currency BB/local currency BB+/stable).

However, the ability of Costa Rica to provide support could be limited given the country's sub-investment-grade sovereign rating and fiscal constraints, Fitch said. In addition, the bank's ratings consider its exposure to foreign-exchange-rate volatility, relatively modest and barely improving core earnings, still high borrower and sector concentrations and limited loan loss reserves, the agency added.

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