The content has been shared, if you want to share this content with other users click here.
Moody's has assigned a standalone bank financial strength rating (BFSR) of D+ and a standalone baseline credit assessment (BCA) of baa3 to state-owned Banco de Costa Rica (BCR), the agency said in a release.
The outlook on all ratings is stable.
The D+ standalone BFSR and baa3 BCA assigned to Banco de Costa Rica reflect the bank's dominant franchise in both corporate and retail banking, stable asset quality and local funding access aided by the government guarantee on its deposit obligations.
"Key constraints to the bank's standalone rating are the limitations to its profitability as a result of relatively high operating leverage and a relatively high corporate tax rate of 30%," Moody's said.
Lending to less creditworthy segments of the economy to foster financial inclusion or to the public sector also poses a risk. However, the bank has limited its public sector lending exposure to around 30% of Tier 1 capital.
Moody's has also assigned Baa3 and Prime-3 long and short term local currency deposit ratings, respectively, as well as Ba1 and not prime long and short term foreign currency deposit ratings, to BCR.