Fitch cuts Salvadorian banks

Fitch Ratings said it downgraded the long-term issuer default ratings of Banco Agricola, SA and Banco Davivienda Salvadoreno, SA (Davivienda Sal) to BB- from BB.

The were revised to negative from stable.

The agency also downgraded Banco Agricola's viability rating to b from bb-, and Davivienda Sal's viability rating to b from b+. The banks' short-term issuer default ratings were affirmed and the national ratings are unaffected.

Fitch said the actions and outlook revisions follow the recent downgrade of El Salvador's sovereign rating to B from B+, its sovereign rating outlook revision to negative from stable, as well as the country ceiling downgrade to BB- from BB.

The downgrade reflects El Salvador's harsh political environment that has imposed additional limits to the government's financing options as well its ability to take further measures to restore public finances, while the negative outlook reflects the persisting risks to meeting financing needs for 2017 in the absence of a political agreements, the agency explained.

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