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April 22, 2008 |
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BANCO SURINVEST: Fitch Assigns B Long-Term Issuer Default Rating Fitch Ratings has assigned Banco Surinvest S.A. a long-term foreign and local currency issuer default rating of 'B', a national long-term rating of 'BBB(uy)' and a support rating of '5'. The rating outlook is stable. Banco Surinvest's ratings reflect the low risk profile of its activities and its good level of liquidity and capitalization. In addition, the bank was acquired by a Swiss bank, Banque Heritage ('BBB-'/'F3') in May 2007, and Fitch Ratings considers the new shareholder of having a positive effect on the bank's strategy. The rating also reflects tough competition in the Uruguayan market and Banco Surinvest's small market share in the financial system. The acquisition by Banque Heritage completely changed the bank's business strategy, which now focuses on wealth management and corporate services. During 2007, the bank finished cleaning up its balance sheet, a process that had started in 2000. As a result, figures for 2008 will only show the performance of the new business and Surinvest forecasts its ROE will be in the 10%-15% range. Net income for 2007 showed a large loss (US$3.88 million), mainly due to losses incurred in the sale of non-performing loans and real estate included in the assets as a result of credit negotiations. Banco Surinvest's main funding source is short-term deposits by non-residents. Because of its new business strategy, the bank will need less funding than before. The bank's capitalization is good and better than that of its peer group, with an equity/assets ratio of 23.71% in 2007 compared with the Uruguayan private-sector average of 10.2%. However, Fitch expects this ratio to fall as soon as new business starts. Headquartered in Montevideo, Uruguay, Banco Surinvest S.A. -- http://www.surinvest.com.uy -- was established in 1981 and began its activities in Montevideo, like Banking House, positioning itself quickly in the market like an institution that combines an ample knowledge of the regional financial markets with the endorsement of a prestigious group of institutional shareholders. |
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