... Costa Rican Private Banks: Prepared for Challenges Stable National Ratings: The ratings of BAC, Scotiabank and Davivienda are well anchored, given the strong parent support. Good Capital Position: Fitch Ratings expects the largest private banks' capitalization to remain adequate, and above the market average, to face balance sheet growth. BAC is outstanding for its high internal capital generation, and, in Fitch's view, all three would receive support from their parents if internal capital generation is not enough to support credit growth. Highly Dollarized: Operations are mostly denominated in U.S. dollars due to the state- owned banks' dominance in the local currency. The private banks' net interest margin (NIM) is lower than the industry average. BAC and Scotiabank's profits are highly sensitive to exchange rate variations due to their open currency position, while Davivienda's profits are less correlated. Nevertheless, an open currency...
