...Stable Outlook Given Ratings: Current ratings levels of Puerto Rican banks incorporate the operating challenges in a difficult local economy. Although most local financial institutions' fundamentals have improved such as strengthened balance sheets, positive trending core performance and better capital positions, Puerto Rico's weak economic fundamentals may continue to limit improvements to financial and credit performance. Doral Financial Downgraded: On May 5, 2014, DRL's long-term IDR ratings were downgraded to `C' given that the company was no longer in compliance with capital requirements in its consent order. Fitch believes this is an isolated issue. Exposure to the Government: Although the bank's direct and indirect exposure to the government may also pose some challenges, stronger capital positions should provide a cushion for any potential writedowns. However, negative rating action could ensue should local banks materially increase exposure to the Puerto Rico government. Weak Local...
