Fitch Ratings has assigned Issuer Default Ratings (IDRs) to Bancolombia Puerto Rico Internacional (BPR).
The rating outlook is stable, and BPR's IDRs and national ratings reflect the potential support it would receive from its main shareholder, Bancolombia, if required.
BPR is one of the offshore banking subsidiaries that serves Bancolombia's largest corporate and private banking customers. In this regard, the bank specializes in placing loans, leasing and factoring operations in both U.S. dollars and euros, targeting companies with a moderate risk profile in countries including Peru, Colombia, Mexico, Chile and Panama. In addition, the bank can place syndicated loans with the group's subsidiaries.
Even though the bank's loan portfolio exhibits good geographic and sectorial diversification, debtor concentration is still elevated, with its 20 largest borrowers representing 87 percent of all loans. Thus, individual delinquencies could have a negative impact on the bank's asset quality metrics. This could pressure the entity to transfer non-performing loans to related entities if additional loan loss reserve requirements affect equity.
The bank finances its operations mainly with term deposits and funds from the group's entities. This easy access to funding is especially important in light of the bank's high depositor concentration as well as the sensitivity of these depositors to a decline in interest rates and volatility of the Colombian peso.
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