...Support-Driven IDRs: The issuer default ratings (IDRs) and support rating of Banco Davivienda Salvadoreno, S.A. (Davivienda Sal) reflect the likelihood of support from its main shareholder, the Colombian Banco Davivienda, S.A. (Davivienda; `BBB'/Outlook Stable). Fitch's opinion on the support is based on the significant reputational risk that Davivienda Sal's default would pose to its parent. Challenging Operating Environment: Banking sector performance remains limited by the sluggish economy and heightened competition. Fitch views the adverse operating environment as a risk to Davivienda Sal's asset quality and medium-term growth prospects. Modest Profitability: Davivienda Sal's profitability is modest but similar to Salvadoran industry's average. The bank's net interest margin has been increasing in the last four years because the improvements in its loan portfolio's profitability are higher than the rise of funding costs. Operational efficiency consistently advances but there is still...
