Fitch Publishes Venezuelan Bank Dashboard for 3Q15

NEW YORK--()--Fitch Ratings has today published a dashboard on the Venezuelan banking system as of 3Q15. The report highlights the sector's principal risks and comments on the potential ratings impact of the current economic crisis.

The Venezuelan operating and regulatory environments continue to contribute to higher risks for the banking sector. Banks remain highly exposed to the speculative grade sovereign (Long- term Issuer Default Rating 'CCC') through holdings of public sector securities. Regulatory caps on lending rates and compulsory loan requirements have constrained the banks' ability to manage credit risk. Similarly, regulatory floors on interest paid on savings and term deposits have supported increased reliance on demand deposits, resulting in a material tenor mismatch between the banks' assets and liabilities.

Fitch underscores how Venezuelan banks have relied on customer deposits for 98.6% of funding at September 2015. Although not Fitch's base case, a relaxation of capital controls or an acute macroeconomic adjustment could cause a marked decline in liquidity. In addition, accelerating inflation (180.9% for 2015) and deficit monetization has fuelled rapid deposit growth, steadily pressured capital, and distorted loan quality and profitability indicators.

In Fitch's view, further devaluation of the currency will have less of a positive impact on bank earnings than previously as banks have reduced their dollar positions. In addition, as securities holdings are predominantly classified as 'held to maturity,' the greatest impact will be on capital rather than earnings, although asset growth will likely offset any gains on this front.

Additional information is available on www.fitchratings.com

Venezuelan Banks: 3Q15 Dashboard

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=878295

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

Contacts

Fitch Ratings
Mark Narron
Director
+1-212-612-7898
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Theresa Paiz Fredel
Senior Director
+1-212-908-0534
or
Media Relations:
Elizabeth Fogerty, +1-212-908-0526
elizabeth.fogerty@fitchratings.com

Contacts

Fitch Ratings
Mark Narron
Director
+1-212-612-7898
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Theresa Paiz Fredel
Senior Director
+1-212-908-0534
or
Media Relations:
Elizabeth Fogerty, +1-212-908-0526
elizabeth.fogerty@fitchratings.com