Moody's assigns FIE B1

Moody's Investors Service said it assigned a bank financial strength rating of E+ to Banco FIE SA, along with a long- and short-term global local-currency deposit ratings of B1 and not-prime and long- and short-term foreign-currency deposit ratings of B3 and not-prime. Moody's also said it assigned the bank a Aa2.bo and BO-1 local-currency long- and short-term deposit ratings and an A1.bo and BO-1 foreign-currency long- and short-term deposit ratings on the Bolivian national scale.

The agency also said it placed the bank's global foreign-currency deposit rating of B3 under review for possible upgrade, in line with a review for Bolivia's country ceiling for foreign-currency deposits, along with its foreign-currency deposit rating of A1.bo.

The outlook is stable.

The ratings reflect the bank's well established franchise within the Bolivian microfinance industry, which was strengthened by the acquisition of the banking license in April 2010 that should allow the entity to broaden its product offering and improve its scale, Moody's said.

The rating also incorporates the bank's proven risk management practices, which have resulted in good financial fundamentals, including low delinquency ratios and sustained profitability, the agency said.

Challenges include the bank's operating and credit risks arising from its current expansion into rural areas, where significant investments in terms of technology and human resources are needed, the agency added.

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