Fitch changes Davivienda view to negative

Fitch Ratings said it revised the outlook on Banco Davivienda SA to negative from stable and affirmed the long-term local and foreign currency issuer default ratings at BB+. The agency also affirmed the national rating outlook to negative from stable and affirmed its AAA(col) rating.

“The negative outlook reflects downside risk as significant assets and earnings deterioration were above Fitch’s expectation due to greater materialization of credit risk, especially within the consumer segment, resulting in an important increase of loan loss provisions.

“Also, Davivienda's earnings have been under pressure as funding costs were driven by the current high-interest environment due to the restrictive monetary policy and the shift from demand deposits to term deposits as part of the NSFR adoption in Colombia,” the agency said in a press release.

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