Fitch Affirms Bladex's IDRs at 'BBB'; Outlook Stable

Published: 2026-04-29 04:42:12 ET BLX

Published on 04/29/2026 at 04:42 am EDT

Fitch Ratings has affirmed Banco Latinoamericano de Comercio Exterior, S.A.'s (Bladex) Long- and Short-Term Issuer Default Ratings (IDRs) at 'BBB' and 'F2, Viability Rating (VR) at 'bbb' and Government Support Rating (GSR) at 'No Support' (ns).

In addition, Fitch affirmed the bank's subordinated debt at 'BB-'.

Fitch also affirmed Bladex's Long- and Short-Term National Ratings at 'AAA(pan)' and 'F1+(pan)' and the ratings for its local debt issuances in Panama and Mexico. The Rating Outlook on both Long-Term ratings is Stable.

Key Rating Drivers

Ratings Driven by Standalone Credit Profile: Bladex's IDR and National Ratings are driven by its standalone credit profile reflected in its 'bbb' VR. Bladex's VR reflects its strong, geographically diversified business profile and conservative risk appetite, supporting stable, resilient financial performance through the cycle. Fitch believes Bladex's successful broad and balanced geographic diversification supports its performance, and operating environment (EO) score of 'bbb-'. This partially mitigates Panamanian OE risks and supports a VR above Panama's 'BB+'/Stable sovereign rating.

OE Assessment Underpinned by Broad Diversification: Fitch's operating environment assessment for Bladex reflects its broad geographic diversification across 25 countries, granting loans and earning assets allocated around 40 jurisdictions. This diversification supports more diversified revenue sources and greater ability to rebalance the portfolio than most regional peers, reducing sensitivity to Panama's OE risks. As a result, the OE score is one notch above that of most Panamanian banks at 'bb+'.

Diversified, Consistent and Recognized Business: Fitch's assessment highlights Bladex's diversified business model, recognized regional corporate franchise, experienced management and robust governance. These support sound strategy execution, a stable financial profile and contained risks. The factors underpin a 'bbb' score, above the implied 'bb', despite Bladex's modest total operating income (TOI) relative to leading Latin American banks and its relatively high rating level. Average TOI in 2022-2025 was USD269.0 million and rose to USD339.6 million at YE 2025. Double-digit yoy growth over the past three years supports the bank's robust business profile.

Prudent Risk Profile: Bladex's prudent risk profile is underpinned by robust underwriting and consistently outstanding asset quality. Its sound, effective risk control framework enables continuous risk monitoring and timely reallocation of exposures in line with its low-risk strategy, supported by a solid mitigation track record. Continued improvements to its technology platform and risk tools further support the framework and are comparable with large regional banks.

Exceptional Asset Quality: Fitch views Bladex's asset quality as a key rating strength, supported by a long track record of exceptional performance. The NPL ratio rise to 0.4% at YE 2025 due to isolated cases. However, Fitch expects it to remain at about 0.5% and remain favorable compared to regional peers. The 'bbb+' score is below the implied 'a' range due to high single-debtor concentrations that could lead to significant credit losses, reflecting the bank's business model.

Profitability Stabilizing: The bank's earnings have stabilized, as operating profit growth has broadly kept pace with risk-weighted assets (RWA) growth. Fitch expects Bladex's profitability to remain stable, with gradual slight improvements over the rating horizon, reflecting its conservative risk profile versus more profitable regional peers with higher risk appetites. Operating profit to RWA was 2.1%, same as the last year-end and close to the 1.8% four-year average.

Loss-Absorption Capacity Strengthened: Bladex's loss-absorption capacity strengthened during 2025 through an AT1 hybrid capital instrument, adding about 210 bps to its Tier 1 capital ratio to 17.4% as of December 2025. The Common Equity Tier 1 (CET1) capital ratio was 15.3%, stable since 2022. Excess loan loss allowances and strong underwriting policies further support the bank's ability to absorb credit risk despite borrower concentrations, which Fitch expects to persist over the rating horizon.

Improving Funding and Liquidity Profile: Bladex's funding and liquidity profile continues to improve, as rapid growth in high-quality deposits has outpaced loan growth for a fourth straight year. This improved the gross loans-to-customer deposits ratio to 139.1%, the best level since 2022. While the ratio remains weaker than that of regional peers, the gap is narrowing. Fitch expects the current level to stabilize over the rating horizon. Strong wholesale funding access, mainly in international markets, contingent liquidity resources, and a solid high-quality liquid asset buffer also support Fitch's assessment of a score one notch above the implied 'bb'.

Rating Sensitivities

Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade

If the risks of the OE materially increase, resulting in a significant deterioration in loan portfolio quality and profitability that pressures the CET1 to RWA ratio to a level consistently below 13.0%;

A change in the bank's risk profile that results in an increased exposure to higher-risk countries or sectors, weakening Fitch's assessment of its OE and the perceived strength of its business profile.

Bladex's Panamanian national ratings could be downgraded if its Long-Term IDR is downgraded by two or more notches.

Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade

If Bladex's asset diversification strategy consistently sustains an improvement in the OE weighted score, which in turn maintains the CET1 to RWA ratio steadily above 17%, while maintaining an operating profit to RWA metric above 2%;

Material reductions in concentrations per debtor, along with a consistent improvement in the OE weighted score, also could improve Fitch's assessment of the bank's asset quality and risk profile, benefiting the VR;

Bladex's Panamanian national ratings are at the highest level of the rating scale and therefore have no upside potential.

OTHER DEBT AND ISSUER RATINGS: KEY RATING DRIVERS

Senior Debt - Panama: The bank's senior unsecured debt issued in the Panamanian market is rated at the same level as Bladex's national ratings, since Fitch considers senior unsecured obligations equates to the default of the bank and usually average expected recoveries upon default.

Senior Debt - Mexico: Bladex' long- and short-term debt issuances in Mexico are rated at 'AAA(mex)' and 'F1+(mex)', respectively. This debt is unsecured; therefore, it ranks equal with other Bladex's senior debts. The bank's senior unsecured debt national ratings reflect Bladex's intrinsic creditworthiness compared to other entities rated in the Mexican market.

Subordinated Debt: Bladex's perpetual non-cumulative fixed-to-fixed subordinated notes are rated 'BB-' as these notes constitute additional Tier 1 (AT1) capital for the bank in accordance with Panamanian banking laws. The AT1 notes' rating is four notches below Bladex's VR, two notches for high loss severity due to the bank's deep subordination and two notches for incremental non-performance risk, given their fully discretionary, non-cumulative coupon cancellation feature, according to Fitch's criteria. The bank's VR is the anchor rating as better reflects its non-performance risk.

GSR: Bladex's 'ns' GSR indicates that external support, while possible, cannot be relied upon. This is because of Fitch's view of Panama's limited ability to support the banking system and domestic-systemically important banks, primarily due to its large size relative to the local economy and the lack of a lender of last resort.

OTHER DEBT AND ISSUER RATINGS: RATING SENSITIVITIES

Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade

The senior unsecured debt national ratings in Panama would be downgraded if Bladex's national ratings are downgraded;

The Long-Term National Rating of the senior unsecured debt issuances of Mexico could potentially be downgraded in the event of a downgrade of Bladex's Long-Term IDR, while the National Short-Term Rating could decrease by a multi-notch downgrade of Bladex's IDR. National ratings indicate credit quality relativities within a jurisdiction, which in this case are relative to other debt issuers in Mexico;

The rating of the AT1 notes is sensitive to movements in the bank's VR in any direction, and the baseline scenario is that the notching will likely remain four notches below relative to the bank's VR;

Due to the GSR is at the lowest rating level, there is no potential for downside.

Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade

There is no upside potential of the senior unsecured debt national ratings, both in Panama and Mexico, since the debt ratings are at the highest level of their respective national rating scale;

Since Panama is a dollarized country without lender of last resort, a GSR upgrade is unlikely.

VR ADJUSTMENTS

The business profile score of 'bbb' is above the 'bb' category implied score due to the following adjustment reasons: management, governance and strategy (positive), and market position (positive), and business model (positive).

The asset quality score of 'bbb+' is below the 'a' category implied score due to the following adjustment reason: concentrations (negative).

The funding & liquidity score of 'bbb+' is above the 'bb' category implied score due to the following adjustment reasons: non-deposit funding (positive), and liquidity coverage (positive).

Summary of Financial Adjustments

Fitch's tangible capital calculation excluded prepaid expenses and other deferred assets from shareholders' equity.

Sources of Information

The principal sources of information used in the analysis are described in the Applicable Criteria.

REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING

The principal sources of information used in the analysis are described in the Applicable Criteria.

ESG Considerations

The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. For more information on Fitch's ESG Relevance Scores, visit https://www.fitchratings.com/topics/esg/products#esg-relevance-scores

RATING ACTIONS

Entity / Debt

Rating

Prior

Banco Latinoamericano de Comercio Exterior, S.A.

LT IDR

BBB

Affirmed

BBB

ST IDR

Affirmed

Natl LT

AAA(pan)

Affirmed

AAA(pan)

Natl ST

F1+(pan)

Affirmed

F1+(pan)

Viability

bbb

Affirmed

bbb

Government Support

Affirmed

subordinated

BB-

Affirmed

BB-

senior unsecured

Natl LT

AAA(mex)

Affirmed

AAA(mex)

senior unsecured

Natl ST

F1+(pan)

Affirmed

F1+(pan)

Page

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The rated entity (and/or its agents) or, in the case of structured finance, one or more of the transaction parties participated in the rating process except that the following issuer(s), if any, did not participate in the rating process, or provide additional information, beyond the issuer's available public disclosure.

APPLICABLE CRITERIA

National Scale Rating Criteria (pub. 22 Dec 2020)

Metodologia de Calificaciones en Escala Nacional (pub. 23 Dec 2020)

Metodologia de Calificacion de Bancos (pub. 28 Sep 2023)

Bank Rating Criteria (pub. 22 Mar 2025) (including rating assumption sensitivity)

Financial Institutions Climate Vulnerability Rating Criteria (pub. 09 Dec 2025)

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