Fitch cuts Banco Dominicano del Progreso

Fitch Ratings said it lowered ratings on Banco Dominicano del Progreso (BDP), including the individual rating downgraded to E from D/E, long-term foreign currency downgraded to CCC from B- and rating placed on Rating Watch negative, short-term foreign currency downgraded to C from B, support rating affirmed at 5, long-term local currency downgraded to CCC from B-and rating placed on Rating Watch negative, short-term local currency downgraded to C from B, national long-term rating downgraded to BB(dom) from BBB+(dom) and short-term rating downgraded to B(dom) from F2(dom).

The agency said these rating actions follow the announcement that BDP's principal shareholders injected around $100 million in fresh capital to cover possible losses that will result from the effects of alleged fraud by the bank's former CEO, which also affected its holding company, Grupo Progreso.

The Rating Watch negative reflects continued uncertainty over the extent of potential capital and/or liquidity injections the bank may require as it addresses the issues noted above and the actions on the individual and long and short-term ratings mirror these uncertainties, Fitch added.

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