Bulletin: Asset Quality Of Peruvian Bank COFIDE Improved In 2018, But Challenges Remain

SAO PAULO (S&P Global Ratings) Feb. 15, 2019--Corporación Financiera de Desarrollo S.A.'s (COFIDE; BBB/Negative/A-2) year-end results show a significant reduction of its problematic credit portfolio, revamp of credit provision deficiencies, and timely government capital injections to support solvency levels. In our view, the capital strengthening plan and other risk-control measures were crucial to support the current rating level. However, we still see challenges stemming from ongoing negotiations over problematic loans and sluggish recovery of infrastructure and construction sectors in the country. COFIDE ended 2018 with non-performing loans representing 6.3% of its credit exposure, down from 18.2% in 2017 and a peak of 28.7% throughout last year. Most of the reduction is from the charge-off of troubled projects: Gasoducto Sur Peruano

...SAO PAULO (S&P Global Ratings) Feb. 15, 2019--Corporaci=n Financiera de Desarrollo S.A.'s (COFIDE; ###/Negative/A-2) year-end results show a significant reduction of its problematic credit portfolio, revamp of credit provision deficiencies, and timely government capital injections to support solvency levels. In our view, the capital strengthening plan and other risk-control measures were crucial to support the current rating level. However, we still see challenges stemming from ongoing negotiations over problematic loans and sluggish recovery of infrastructure and construction sectors in the country. COFIDE ended 2018 with non-performing loans representing 6.3% of its credit exposure, down from 18.2% in 2017 and a peak of 28.7% throughout last year. Most of the reduction is from the charge-off of troubled projects: Gasoducto Sur Peruano ($140 million), Lfneas de Transmisi=n Peruanas ($63 million), and Generadora ElTtrica Molloco ($30 million). The remainder of the drop in NPLs reflects...

Bulletin