Fitch upgrades Occidental's national ratings on capital injections

Tuesday, August 16, 2011

Fitch has upgraded the national scale ratings of Venezuela's Banco Occidental de Descuento (BOD), while revising the outlook for its international issuer default rating to stable from negative.

Occidental's long and short-term rating was upgraded to BBB- and F3, respectively. The international issuer default rating was affirmed at B-.

"These rating actions are driven by the faster than expected recovery of the bank's capitalization ratios, due to a mix of fresh capital injections and increased, though still volatile, profits," the ratings agency said in a statement.

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"Capital is the Achilles' heel of the bank, especially when the sizable burden of intangibles (around 75% of its total equity) is considered," Fitch analysts added.

Occidental is Venezuela's sixth largest bank, with about 6% of financial system deposits as of May.