...Banking System Mostly Locally Owned: Local shareholders hold close to 70% of the system's loan market share while foreign-owned banks have increased their market share after Bancolombia acquired a controlling stake of BAM. Sizable Exposure to the Guatemalan Sovereign: BI, GyT, BAM and Banrural's ratings are capped by the sovereign. These banks hold large sovereign debt securities portfolios as a proportion of their total assets and equity. Business volumes are concentrated in the country. Pressured Capital Levels: Low capitalization metrics will continue to be a structural weakness, due to a potentially narrower NIM and relatively high dividend payout ratio. Systemwide Fitch core capital levels are the lowest of the Central American region, at 13.04%. In Fitch Ratings' opinion, maintaining adequate loss-absorption cushions is important given high concentration risks. Significant Borrower Concentration: Loan quality metrics are sound; the ratio of nonperforming loans in the industry remains...
