Fitch Ratings has affirmed FUCEREP - Cooperativa de Ahorro y Credito's (FUCEREP) ratings as follows:
--Foreign and local currency Issuer Default Rating (IDR) at 'B-';
--National long-term rating at 'BB(uy)';
--Support floor rating at 'NF';
--Support rating at '5'.
Fitch has revised the Rating Outlook to Positive from Stable.
The ratings assigned to FUCEREP reflect its small size, modest capitalisation and good performance in the last two years. The ratings also reflect the gradual implementation of a restricted licence (primarily limiting foreign currency activities) until 2010.
The approval of the restricted licence (which has lower capital requirements) by the Central Bank of Uruguay (BCU) in November 2006, allows FUCEREP to concentrate on its current business plan.
FUCEREP's performance improved significantly in 2007, mainly because of its growing in financial revenues. Fitch considers FUCEREP's decisions and the economic situation in Uruguay (and also uruguayan financial system) a strong platform to develop its activities and to get its objectives.
Low-quality loans (ie loans rated '3', '4' and '5') have increased in 2007 but delinquency ratios are in similar levels in comparison with 2006 because of increases in loan's stock. Loan loss reserves improve but there is still a risk for FUCEREP's equity.
Deposits from residents were the main source of funds, with 35.4% of the total being dollar-denominated. Liquidity is adequate, with liquid assets representing 52.6% of deposits at year-end 2007.
FUCEREP's capitalisation has improved. Fitch considers that a strong capitalisation level is very important for the company's future. Thus, the cooperative's limited ability to raise fresh capital create a limit in FUCEREP's growing.
Credit research on FUCEREP is available on the Fitch Ratings web site, www.fitchratings.com.
Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.
Contacts:
Emiliano Fiori, +54 11 5235 8100, Buenos Aires
Santiago
Gallo, +54 11 5235 8100, Buenos Aires
or
Media Relations:
Christopher
Kimble, 212-908-0226, New York
