Moody’s Negative on Bancolombia

Moody’s has changed the outlook Bancolombia’s Baa3 ratings to negative, it says. The move follows a review initiated in February after Bancolombia agreed to buy HSBC Panama, which the agency sees possibly pushing the Colombian bank’s capital ratios down. Bancolombia closed the $2.23bn HSBC Panama deal, as well as the $217m purchase of 40% of Banco Agromercantil in Guatamala, last month. Moody’s says it expects capital ratios to stay low over the next 6-12 months, but adds that raising more capital would boost Bancolombia’s credit outlook. “The bank’s shareholders gave approval last February for a capital injection of about $2.2bn, which if carried out would improve Bancolombia’s loss absorption capacity,” Moody’s says.