Fitch Affirms Bancaribes's IDR at 'B'; Outlook Stable

NEW YORK--()--Fitch Ratings has affirmed Venezuela-based Banco del Caribe, C.A. Banco Universal's (Bancaribe) Issuer Default Rating (IDR) at 'B' with a Stable Rating Outlook. Additionally, Fitch affirmed National Ratings of Bancaribe and its subsidiary Banco de la Gente Emprendedora, C.A. (Bangente). A full list of rating actions follows at the end of this press release.

RATING ACTION RATIONALE

Bancaribes's IDR is driven by its financial strength reflected in its Viability Rating (VR). The bank's IDRs are one notch below the Sovereign's ratings (local and foreign currency IDRs 'B+'; Outlook Negative by Fitch).

Fitch affirmed Bancaribes's VR and IDR ratings based on the bank's overall good financial performance, despite the high degree of government intervention in the banking business. In Fitch's opinion, Bancaribe's successful sound loan growth strategy in recent years has underpinned its resilient credit risk profile and historic profitability levels, despite Venezuela's inherent operational volatility.

Fitch believes that the shareholders' willingness to provide support should it be required is possible, though it cannot be relied upon due to the governments interference with the banking system, underpinning Bancaribe's Support Rating of '5'. Bancaribe's Support Rating Floor of 'No Floor' reflects Venezuela's speculative grade rating, and the government's limited willingness and capacity to provide support.

SENSITIVITIES/RATING DRIVERS

IDRS, VR, AND NATIONAL RATINGS

Bancaribe's ratings reflect its resilient performance in a challenging environment, good asset quality, comparably higher profitability (even when accounting for inflation), and low liquidity risk relative to other similarly rated peers. Comparably weaker capitalization ratios, relatively higher deposit funding concentration, and the negative effects of government intervention over the banking business and overall private sector activities continue to constrain the bank's ratings.

The Rating Outlook for the long-term IDRs is Stable. Positive rating actions will be limited as the Sovereign's IDRs currently has a Negative Outlook. A significant deterioration in the bank's asset quality which hinders its equity loss absorption capacity and pressures the bank's Fitch core capital ratio to a level below 10% could pressure the bank's ratings downward, although this is not Fitch's base case scenario.

In the event of a sovereign ratings downgrade, Bancaribe's national ratings are not expected to be negatively affected. In Fitch's opinion, Bancaribe's credit risk profile will maintain its relative position compared with its local peers.

SUPPORT RATING AND SUPPORT RATING FLOOR

There is limited upside to the bank's support rating and support rating floor over the medium term given the sovereign's current ratings and Outlooks and the government's propensity to intervene in the banking business and overall private sector activities.

BANGENTE's SENSITIVITIES/RATING DRIVERS

Bangente's long-term national rating is one notch below Bancaribe's national rating, and is driven by the probability of direct or indirect support that will be provided by Bancaribe, should it be required. Fitch considers Bangente a strategic operation for Bancaribe, its majority shareholder (89%).

Bangente's ratings are sensitive to a change in Bancaribe's credit risk profile. Given Fitch's view on the parent's support propensity, Fitch would maintain Bangente's long term national rating one notch below that of Bancaribe in the event of a change in the parent's rating. .

Bancaribe is a mid-size bank in Venezuela. The bank has a strong competitive position in the middle market with adequate coverage in most of the country's regions. Bangente is a small-size microfinance bank.

Fitch has affirmed the following ratings for Bancaribe:

--Long-term foreign and local currency IDRs at 'B'; Outlook Stable;

--Short-term foreign and local currency ratings at 'B';

--Viability rating at 'b';

--Support at '5';

--Support floor 'NF';

--Long-term national-scale rating at 'A+(ven)';

--Short-term national-scale rating at 'F1(ven)';

Fitch has affirmed the following ratings for Bangente:

--Long-term national-scale rating at 'A(ven)';

--Short-term national-scale rating at 'F1(ven)';

Additional information is available at 'www.fitchratings.com' and 'www.fitchvenezuela.com'. The ratings above were solicited by, or on behalf of, the issuer, and therefore, Fitch has been compensated for the provision of the ratings.

Applicable Criteria and Related Research:

--'Global Financial Institutions Rating Criteria' (Aug. 15, 2012);

--'Rating FI Subsidiaries and Holding Companies' (Aug. 10, 2012);

--Outlook 2013: Andean Banks' (Dec. 14, 2012).

Applicable Criteria and Related Research:

Global Financial Institutions Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=686181

Rating FI Subsidiaries and Holding Companies

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=679209

2013 Outlook: Andean Banks

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=696215

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Contacts

Fitch Ratings
Primary Analyst (Bancaribe) and Secondary Analyst (Bangente)
Theresa Paiz-Fredel
Senior Director
+1-212-908-0534
Fitch Ratings, Inc.
One State Street Plaza
New York, NY 10004
or
Primary Analyst (Bangente) and Secondary Analyst (Bancaribe)
Pedro El Khaouli
Senior Director
+58-212-286-3844
Fitch Venezuela, Sociedad Calificadora de Riesgo, S.A.
Ave. Fco. De Miranda, Edif. Mene Grande II, Ofic. 23,
Caracas, Venezuela
or
Committee Chairperson
Alejandro Garcia
Senior Director
+1-52-81-8335-7179
or
Media Relations:
Elizabeth Fogerty, +1-212-908-0526
elizabeth.fogerty@fitchratings.com

Contacts

Fitch Ratings
Primary Analyst (Bancaribe) and Secondary Analyst (Bangente)
Theresa Paiz-Fredel
Senior Director
+1-212-908-0534
Fitch Ratings, Inc.
One State Street Plaza
New York, NY 10004
or
Primary Analyst (Bangente) and Secondary Analyst (Bancaribe)
Pedro El Khaouli
Senior Director
+58-212-286-3844
Fitch Venezuela, Sociedad Calificadora de Riesgo, S.A.
Ave. Fco. De Miranda, Edif. Mene Grande II, Ofic. 23,
Caracas, Venezuela
or
Committee Chairperson
Alejandro Garcia
Senior Director
+1-52-81-8335-7179
or
Media Relations:
Elizabeth Fogerty, +1-212-908-0526
elizabeth.fogerty@fitchratings.com