...Viability Ratings Drive IDRs: The issuer default ratings (IDRs) of Bancolombia, Banco de Bogota, Davivienda and Banco de Occidente are based on their viability ratings or stand-alone intrinsic financial strengths. Banco BBVA Colombia's IDRs reflect institutional support. Decelerating GDP Growth: Even though Colombia's GDP growth is expected to decline to the 3.0%-3.5% range in 2015-2016, the stable economic environment and relatively low banking penetration (loans to GDP stood at 39.6% at December 2014) should contribute to sustained bank asset growth, while gains on the employment front have fueled demand for retail lending. The largest Colombian banks have adjusted their risk appetite to the changing market. Solid Asset Quality: Asset quality at all five banks covered in this review remains sound and compares very well with regional peers (similarly rated commercial banks in Latin America) as a result of economic stability, sustained loan growth and conservative underwriting standards....
