Bancaribe Slips to B

Fitch has cut downgraded Banco del Caribe’s (Bancaribe) long-term issuer default rating to B (negative) from B+ to reflect a fall in capitalization after strong growth in the last 18 months. “Profitability levels are undermined by fierce competition and a complex array of controls imposed by the government that limits the bank’s ability to manage its business, a situation that affects the rest of the system as well,” says Fitch. “Also, the ratings still incorporate its strong competitive position in the middle market, improved asset quality and adequate income diversification,” it adds. Bancaribe is a medium-sized bank with a 3.3% market share in terms of invested funds (assets plus investment funds) as of June. As of end-2006, 51.1% of Bancaribe was controlled by the Dao family and 26.6% was held by Scotia International, a wholly owned subsidiary of Scotiabank, with the remainder publicly held.