OREANDA-NEWS. Fitch Ratings has affirmed Banco de Comercio Exterior de Colombia S.A.'s (Bancoldex) foreign currency long-term Issuer Default Rating (IDR) at 'BBB', local currency long-term IDR at 'BBB+', and Support Rating Floor (SRF) at 'BBB'. The Rating Outlook is Stable. A full list of rating actions is at the end of this rating action commentary.


Bancoldex's ratings are aligned with those of the sovereign, reflecting Fitch's assessment of the Colombian government's willingness and capacity to provide timely support to Bancoldex if needed. Although the Colombian government does not explicitly guarantee Bancoldex's liabilities, Fitch views the entity as an integral arm of the state given its status as a Special Official Institution, its strategic importance to the implementation of the country's National Development Plan, and its majority ownership by state bodies, specifically the Ministry of Commerce, Industry and Tourism and the Ministry of Finance and Public Credit, which together held 99.7% of shares.

Bancoldex is one of Colombia's wholesale development banks. Since 2003, its role has expanded from a trade finance institution focused on the facilitation of export credit, to a general business development bank to support the growth of companies in all sectors of the Colombian economy, regardless of size.

Bancoldex is in the process of redefining its business model and has announced its intention to raise capital from private sources, pursue greater scale and expand its services to include direct corporate lending, initially through participations in syndicated loans to mature enterprises. Such initiatives, however, are in early stages of consideration and a material dilution of the government's ownership is not expected in the short term.

The bank's IDRs and national ratings reflect Bancoldex's excellent asset quality. On an unconsolidated basis, Bancoldex has a long track record of 0.0% non-performing loans, benefitting from its significant exposure to the country's largest financial institutions. Elevated levels of borrower concentration are mitigated by adequate reserves (4.0% of gross loans at June 2015) and capital (Fitch Core Capital ratio at 26.7% at June 2015). Fitch views Bancoldex's loss absorption capacity as adequate given Bancoldex's modest levels of internal capital generation and high borrower concentration.

Bancoldex's financial performance (ROAA of 1% in 2014) remains limited by low margins, in keeping with its business model and social mission. In Fitch's view, any long term strategic plan to pursue more aggressive growth must be closely accompanied by a sustained improvement in the bank's profitability.

The bank's outstanding ordinary bonds are senior unsecured and therefore are rated in line with the issuer.

The Stable Outlook is in line with Fitch's outlook of the sovereign.


As a development bank that is majority owned by the state, Bancoldex's creditworthiness and ratings are directly linked to those of the sovereign. Hence, its ratings should move in line with any potential change in Colombia's ratings.

Fitch has affirmed the following ratings:

Banco de Comercio Exterior de Colombia S.A.
--Foreign currency long-term IDR at 'BBB'; Outlook Stable;
--Foreign currency short-term IDR at 'F2';
--Local currency long-term IDR at 'BBB+';
--Local currency short-term IDR at 'F2';
--Support Rating at '2';
--Support Rating Floor at 'BBB';
--Long-term national-scale rating at 'AAA(col)'; Outlook Stable;
--Short-term national-scale rating at 'F1+(col)';
--Senior unsecured bond issuance at 'AAA(col)'.