Fitch Places Banco de los Trabajadores on Rating Watch Negative

NEW YORK--()--Fitch Ratings has placed Banco de los Trabajadores' (Bantrab) ratings on Rating Watch Negative. A full list of rating actions is at the end of this rating action commentary.

The IDRs, VR, national ratings and senior debt ratings have been placed on Rating Watch Negative due to the potential risks following recent news releases of an ongoing investigation by the Guatemalan authorities of three members of the Board of Directors for an alleged fraud attempt on the bank's shareholders.

In Fitch's opinion, the level of development and effectiveness of its corporate governance has been tested. This is because Bantrab's government bodies did not take corrective and mitigating measures. To date, these executives remain in their positions on Bantrab's Board of Directors and the financial performance and funding profile of the bank have not been affected materially.

The Rating Watch Negative reflects that ratings could be downgraded if the bank's business and financial profile is affected materially and corrective measures regarding corporate governance are not set in place.

KEY RATING DRIVERS

IDRS, VR, NATIONAL RATINGS AND SENIOR DEBT

Bantrab is characterized by its high risk appetite, focusing on segments of middle and low income, particularly in the Guatemalan public sector. The bank is characterized by good loan portfolio quality, sound capital position and a business model focused on the riskier segments of Guatemalan retail banking.

SUPPORT RATING AND SUPPORT RATING FLOOR

The bank's Support Rating and Support Rating Floor are unaffected.

RATING SENSITIVITIES

IDRS, VR, NATIONAL RATINGS AND SENIOR DEBT

A ratings downgrade could occur if the bank fails to address the weaknesses that have arisen from the current investigation of its executives and if its business activities and financial profile were to be affected in a material way.

On the other hand, the ratings could be affirmed and the Watch Negative removed if its business and financial profiles remain unaffected and its corporate governance is strengthened.

Fitch has placed the following ratings on Rating Watch Negative:

Banco de los Trabajadores

--Long-Term Foreign Currency IDR 'BB-';

--Short-Term Foreign Currency IDR 'B';

--Long-Term Local Currency IDR 'BB-';

--Short-Term Local Currency IDR 'B';

--Viability Rating 'bb-';

--Long-term national rating of 'A(gtm)';

--Short-term national rating at 'F1(gtm)'.

Financiera de los Trabajadores, S.A.

--Long-term national rating 'A(gtm)';

--Short-term national rating 'F1(gtm)'.

Bantrab Senior Trust

--Long-term foreign currency loan participation notes 'BB-'.

The following ratings are unaffected:

Banco de los Trabajadores

--Support '5';

--Support Rating Floor 'NF'.

Additional information is available on www.fitchratings.com.

Applicable Criteria

Global Bank Rating Criteria (pub. 20 Mar 2015)
https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=863501

Metodologia de Calificaciones Nacionales (pub. 13 Dec 2013)
https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=727099

Metodologia de Calificacion de Instituciones Financieras no Bancarias (pub. 29 May 2015)
https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=866614

Additional Disclosures

Solicitation Status
https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=1006035

Endorsement Policy
https://www.fitchratings.com/jsp/creditdesk/PolicyRegulation.faces?context=2&detail=31

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Contacts

Fitch Ratings
Primary Analyst:
Mark Narron, +1-212-612-7898
Director
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Secondary Analyst:
Alvaro D. Castro, +503 2516 6615
Associate Director
or
Committee Chairperson:
Alejandro Garcia, +1-212-908-9137
Managing Director
or
Media Relations:
Elizabeth Fogerty, +1-212-908-0526
New York
elizabeth.fogerty@fitchratings.com

Contacts

Fitch Ratings
Primary Analyst:
Mark Narron, +1-212-612-7898
Director
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Secondary Analyst:
Alvaro D. Castro, +503 2516 6615
Associate Director
or
Committee Chairperson:
Alejandro Garcia, +1-212-908-9137
Managing Director
or
Media Relations:
Elizabeth Fogerty, +1-212-908-0526
New York
elizabeth.fogerty@fitchratings.com