Moody's: Chilean banks rated highest

Moody's Investors Service says that its ratings for the Chilean banks continue to be the highest on average within its Latin American bank rating universe.

Moody's said in its annual report on Chilean banking that the Chilean banks' higher bank financial strength ratings rest on their earnings quality and on their managements' focus on improving operating efficiency, boosting fee growth and bolstering solvency.

The ratings reflect the banks' solid earnings quality, superior operating efficiency as well as strong credit and market risk management as a system, according to Moody's report.

Moody's said the ratings are also based on the Chile's relatively stable operating environment and its consistent track record in banking regulation and supervision and the banks' high commitment to fee growth and improving solvency within Chile's relatively mature banking market.

A major risk faced by the Chilean banks as a group is the potential for rising interest rates in the United States, which would increase the banks' cost of funding and at the same time negatively impact their securities and other capital markets-related income, the report said.

The Chilean banks include BankBoston NA (Chile), Citibank NA (Chile Branch), Banco del Estado de Chile, Banco de Credito e Inversiones, Banco BiCE, BBVA, Scotiabank Sud Americano, Banco Santander Santiago and Banco de Chile.

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