Moody’s elevó perspectiva de calificaciones de Banco de Bogotá y Bancolombia de negativa a estable

Moody’s elevó perspectiva de calificaciones de Banco de Bogotá y Bancolombia de negativa a estable

Nueva York.-  Moody’s Investors Service cambió hoy la perspectiva de las calificaciones de Banco de Bogotá SA (Banco de Bogotá) y Bancolombia SA (Bancolombia) a estable, desde negativa, y al mismo tiempo afirmó todas las calificaciones y evaluaciones asignadas a estos bancos.

Incluidas sus calificaciones de depósitos de largo plazo en moneda local y extranjera de Baa2, las calificaciones de deuda senior no garantizada en moneda extranjera de Baa2, así como las calificaciones de riesgo de contraparte de Baa2 (cr).

Además, Moody’s también confirmó las evaluaciones crediticias de referencia (BCA) ba1 de estos bancos y las BCA ajustadas, y todas las calificaciones de corto plazo. La calificación de deuda subordinada en moneda extranjera de Bancolombia también se afirmó en Ba2.

Para obtener información adicional, consulte el comunicado de prensa relacionado: «Moody’s cambia la perspectiva de la calificación de Colombia a estable de negativa, afirma calificaciones de Baa2» en https://www.moodys.com/research/–PR_455150

CALIFICACIONES RACIONALES

Las acciones de calificación fueron impulsadas por la afirmación y cambio en la perspectiva a estable de negativa de la calificación de bonos soberanos de Baa2 de Colombia, que a su vez se vio respaldada por la reciente aprobación de las medidas fiscales de que los proyectos de Moody’s respaldarán la estabilización de la deuda en los próximos años, manteniendo el crédito de Colombia. métricas en línea con las de sus pares con calificación Baa2.

Moody’s changes ratings outlook on Banco de Bogota and Bancolombia to stable from negative, affirms Baa2 ratings

New York.- Moody’s Investors Service («Moody’s») has today changed the outlook on Banco de Bogota S.A.’s (Banco de Bogota) and Bancolombia S.A.’s (Bancolombia) ratings to stable, from negative, and at the same time affirmed all ratings and assessments assigned to these banks, including their Baa2 long-term local and foreign currency deposit ratings, the Baa2 foreign currency senior unsecured debt ratings as well as the Baa2(cr) counterparty risk ratings.

In addition, Moody’s also affirmed these banks’ ba1 baseline credit assessments (BCA) and adjusted BCAs, and all short-term ratings. Bancolombia’s foreign currency subordinated debt rating was also affirmed at Ba2.

The rating action follows Moody’s announcement published on 6 October 2021 that it had affirmed the Government of Colombia’s Baa2 bond rating, and changed the outlook to stable, from negative. For additional information, please refer to the related press release: » Moody’s changes outlook on Colombia’s rating to stable from negative, affirms Baa2 ratings » at https://www.moodys.com/research/–PR_455150

RATINGS RATIONALE

The rating actions were prompted by the affirmation and change in outlook to stable from negative of Colombia’s Baa2 sovereign bond rating, which was in turn supported by the recent approval of fiscal measures that Moody’s projects will support debt stabilization over the coming years, keeping Colombia’s credit metrics in line with those of Baa2-rated peers.

A strong economic recovery in 2021 and Moody’s expectation that growth will remain robust in the coming years reflect Colombia’s strong resilience to shocks, which also lead to an expectation of a normalization of banks’ operating environment after the pandemic crisis.

Banco de Bogotas and Bancolombia’s Baa2 deposit and senior unsecured debt ratings are underpinned by their respective ba1 BCAs and receive a two-notch uplift due to Moody’s assessment of a very high likelihood of government support, considering these banks’ systemic importance in Colombia. Therefore, the change in the banks’ ratings outlook to stable from negative is aligned to the action on the ratings assigned to the Government of Colombia and its stable outlook.

BANCO DE BOGOTÁ

The affirmation of Banco de Bogota’s ba1 BCA reflects the bank’s strong and resilient earnings generation, which was sustained during 2020 and the first half of 2021, and its steady access to low-cost retail deposits that benefits liquidity and margins. These strengths are counterbalanced by the bank’s relatively low capital buffers, with a tangible common equity (TCE)/risk-weighted assets (RWA) ratio of 8.7% as of June 2021, asset quality pressures arising from the pandemic and its exposures to riskier operating environments in Central America.

In June 2021, Banco de Bogota reported 6.4% of stage 3 loans to gross loans, still above 2019 level of 5%. While 15% of the bank’s loans were still benefiting from relief measures as of June 2021, more than two thirds of this portfolio already include active payment schedules. In addition, Banco de Bogota maintained adequate loan loss reserves coverage, that stood at 5.2% of gross loans in June 2021, which will help mitigate the impact of future impairments as grace period come to an end. The bank’s profitability remained higher in the first half of 2021, with an annualized net income to tangible assets of 1.6%.

BANCOLOMBIA

By affirming Bancolombia’s ba1 BCA, Moody’s acknowledges the bank’s good earnings generation and its continued access to broad and stable core funding sources, supported by its well-established market position in Colombia and diversified business profile. The bank’s BCA also incorporates its exposure to riskier operating environments in Central America which pressure the bank’s Macro Profile, given the weak operating conditions in most of the countries in the region compared to Colombia.

After a sharp decline in profitability in 2020 resulting from conservative provisions built by the bank, Bancolombia reported a strong performance in the first half of 2021 with net income to tangible assets increasing to 1.4% annual basis, from just 0.1% for the entire year of 2020. The bank’s problem loans, measured as loans classified as stage 3, peaked at 8.6% in December 2020, and have gradually declined to 7.8% in June 2021, covered by a high reserve coverage of 8.3% of gross loans, equivalent to 1.1x stage 3 loans in June. Even if additional asset quality pressures materialized in the coming quarters, provisions will likely be sufficient to cover expected losses under our base case scenario, which in turn drives the stable outlook of the bank’s ratings.

The bank’s capitalization measured by tangible common equity (TCE) to risk-weighted assets (RWA) stood at 9.9% in June 2021, reflecting subdued loan growth since 2020 and earnings recovery in the first half of 2021.

ISSUERS AND RATINGS AFFECTED

..Issuer: Banco de Bogota S.A.

Affirmations:

.Long term local currency deposit rating of Baa2, Stable from Negative

.Long term foreign currency deposit rating of Baa2, Stable from Negative

.Long term foreign currency senior unsecured rating of Baa2, Stable from

Negative

.Short term local currency deposit rating of Prime-2

.Short term foreign currency deposit rating of Prime-2

.Long-term foreign currency global subordinated debt rating of Ba2

.Long term local currency counterparty risk rating of Baa2

.Long term foreign currency counterparty risk rating of Baa2

.Short term local currency counterparty risk rating of Prime-2

.Short term foreign currency counterparty risk rating of Prime-2

.Adjusted Baseline Credit Assessment of ba1

.Baseline Credit Assessment of ba1

.Long-term counterparty risk assessment of Baa2(cr)

.Short-term counterparty risk assessment of Prime-2(cr)

Outlook action:

.Outlook, Changed to Stable from Negative

..Issuer: Bancolombia S.A.

Affirmations:

.Long term local currency deposit rating of Baa2, Stable from Negative

.Long term foreign currency deposit rating of Baa2, Stable from Negative

.Long term foreign currency senior unsecured rating of Baa2, Stable from

Negative

.Short term local currency deposit rating of Prime-2

.Short term foreign currency deposit rating of Prime-2

.Long-term foreign currency global subordinated debt rating of Ba2/Ba3

(hyb)

.Long term local currency counterparty risk rating of Baa2

.Long term foreign currency counterparty risk rating of Baa2

.Short term local currency counterparty risk rating of Prime-2

.Short term foreign currency counterparty risk rating of Prime-2

.Adjusted Baseline Credit Assessment of ba1

.Baseline Credit Assessment of ba1

.Long-term counterparty risk assessment of Baa2(cr)

.Short-term counterparty risk assessment of Prime-2(cr)

Outlook action:

.Outlook, Changed to Stable from Negative