Over the last two years, the credit fundamentals of Peruvian bank, COFIDE, were significantly affected by a massive corruption probe in Brazil, known as Lava Jato, that spread to Peru and hurt the country's infrastructure and construction sectors. After a sharp financial deterioration during 2017-2018, the bank was able to write-off most of its problematic credit portfolio, revamp credit provision deficiencies, and maintain satisfactory solvency levels thanks to timely government capital injections. Still, we expect COFIDE's credit exposure to remain single-name and sector concentrated and for the bank to have volatile asset quality metrics given its riskier nature, although supported by sound coverage levels. As a result, we're revising the outlook to stable from negative and affirming the 'BBB/A-2' ratings
