...VR Drives IDRs: Banco de Occidente S.A.'s (Occidente) IDRs are driven by its Viability Rating (VR) of `bbb', which in turn is highly influenced by Colombia's operating environment and the bank's solid capital ratios. The ratings also consider the bank's moderate franchise and its good asset quality metrics as well as its low-risk and diversified business model. The ratings incorporate the recent decline in profitability, while the bank's main weakness is its moderately concentrated funding. Solid Capital Ratios: Consistent capital generation underpins Occidente's capital metrics. As profits did not keep pace with asset growth, the bank's Fitch Core Capital (FCC) ratio declined slightly in 2017 to 14.14%. In Fitch Ratings' view, Occidente's capital ratios are adequate given the bank's excess loan loss reserves and good asset quality. The bank's capital ratios continued to exceed those of its domestic peers. Good Asset Quality: Occidente's reasonable credit and risk management policies underpin...
