Ratings roundup: FirstBank, Banco Cetelem, Interbank

Tuesday, April 26, 2011

Moody's has downgraded Puerto Rican FirstBank's long-term deposits and rated Argentine bank Banco Cetelem's debt, while Fitch revised the ratings outlook on Peru's Interbank.

Moody's cut First BanCorp's (NYSE: FBP) primary operating subsidiary's long-term deposits to B3 from B2 and senior unsecured rating to Caa2 from B3, concluding a review that began June 4, 2010.

The downgrade reflects Moody's view that FirstBank's continued high level of problem assets, as reflected in its recently filed 10-K, limits its prospects for a return to profitability, the ratings agency said in a report.

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The ratings have a negative outlook, reflecting the company's significant level of problem assets in a very challenging market, where trends are likely to remain weak at least throughout 2011, Moody's said.

San Juan-based First BanCorp - the second-largest financial institution in Puerto Rico - reported total assets of US$15.6bn as of December 31, 2010. Canada's Scotiabank (NYSE: BNS) holds a 10% stake in the company.

To read the full report, go to this link


Moody's also assigned a Ba1 global local currency senior debt rating to Argentine bank Banco Cetelem's 30-month third bond issue for an amount up to 100mn pesos (US$24.5mn), as well as to the fourth issue for an amount of 30mn pesos, due in 270 days.

The issues were rated Aaa on a local currency scale.

The ratings reflect the bank's status as a subsidiary of France's Cetelem, as well as the formal guarantee provided by French bank BNP Paribas to Cetelem's debt, Moody's said.

Banco Cetelem had assets of 602mn pesos and total loans of 574mn pesos as of end-December 2010.

To read the full report, go to this link


Fitch revised Interbank's ratings outlook to positive given its solid performance through the global crisis, which saw the bank gain market share and consolidate itself as a top player in the retail segment while expanding in the corporate segment.

The ratings could be upgraded if Interbank is able to sustain its current performance while sufficiently managing its rapidly growing loan portfolio's credit quality, as well as maintain its capital and reserve coverage at suitable levels for a bank with its risk profile, the agency said in a report.

Fitch also affirmed Interbank's foreign and local currency long-term issuer default ratings at BBB-, as well as all of its other ratings, reflecting its sound retail franchise, focused strategy, good asset quality, adequate capital and reserves, improved liquidity and solid performance through the crisis.

To read the full report, go to this link