OREANDA-NEWS. Fitch Ratings has affirmed Global Bank Corporation's (GB) long-term Issuer Default Rating (IDR) at 'BBB-' following Fitch's peer review of Panama's largest banks. The Rating Outlook is Stable. See the full list of rating actions at the end of this release.

KEY RATING DRIVERS

IDR, VR, SUPPORT, SUPPORT RATING FLOOR AND NATIONAL RATINGS
GB's IDR and National ratings are driven by its intrinsic creditworthiness, as reflected in its Viability Rating (VR). The VR reflects GB's consistent strategy, good profitability and asset quality indicators, funding diversification, and sound positioning within its core market which all support its ratings. The bank's ratings also factor in its moderate capitalization ratios and moderate loan portfolio concentration by size.

GB's Support Rating and Support Rating Floor of '5' and 'NF', respectively, indicate that, although possible, external support cannot be relied upon, given the bank's limited systemic importance.

GB's profitability ratios are sound and above the Panamanian banking system average. Results have been favored by lower credit costs and good operating efficiency. However, GB has been experiencing a gradual decline in its profitability metrics as a result of narrower margins. The bank's net interest margin (NIM) has been low and slightly decreasing, reflecting the heightened local competition. In Fitch's view, GB's profitability will likely stabilize at current levels.

The bank's capital position has continued to improved, but stills lags behind the system's average. Internal capital generation is well above peers, given the good profitability and low dividend pay-out ratio. GB is likely to continue expanding its capital base, albeit at a more moderate pace. Internal capital generation should fund any additional capital required to sustain an adequate loan loss absorption capacity.

GB's loan portfolio maintains a good credit profile due to its diversification by lending segment and a low concentration by borrowers. Loans past due more than 90 days represented 0.8% of gross loans at second quarter 2015 (2Q15). Restructured loans represented a low 2.1% of total loans, and net charge-offs are well under control. GB's investment portfolio quality is good and consists mainly of fixed-income securities, most in the investment-grade category. Fitch expects GB's asset quality to remain sound over the medium term.

Fitch considers funding to be adequate, underpinned by a stable deposit base, and adequately managed liquidity. However, loans are increasingly being funded with wholesale facilities, in line with its strategy. In Fitch's opinion, material changes in funding structure toward wholesale funding may better adequate maturity mismatches, but could also could give rise to refinancing and liquidity risks, in case of a sharp reversal of market sentiment toward the sector or country.

UNSECURED SENIOR NOTES
The senior unsecured notes are rated at the same level as the bank's IDR, in accordance with Fitch's criteria. The notes constitute direct, unconditional and unsecured senior obligations of the issuer. They rank pari passu among themselves and with all other unsubordinated and unsecured obligations of GB. The tenor of the issue is five years, fixed-rate (5.125%), and in an amount of USD550 million.

RATING SENSITIVITIES

IDR, VR AND NATIONAL RATINGS
Fitch believes positive rating action is limited over the medium term. Positive actions could result from greater revenue diversification and further consolidation of the bank's franchise while sustaining an adequate capital position over the long term.

GB's ratings could be downgraded in the event of a severe deterioration in asset quality or a decline in its financial performance, resulting in a sustained decrease in the Fitch Core Capital ratio to below 9.5%.

UNSECURED SENIOR NOTES

Changes in the notes' rating are contingent on rating actions for GB.

Fitch has affirmed the following ratings:

Global Bank Corporation
--Long-term IDR at 'BBB-'; Outlook Stable
--Short-term IDR at 'F3'
--Viability Rating at 'bbb-';
--Support Rating at '5';
--Support floor at 'NF';
--National long-term national rating at 'AA(pan)', Outlook Stable;
--National short-term national rating at 'F1+(pan)';
--USD550 million senior unsecured notes due 2019 at 'BBB-';
--Corporate bonds of USD50 million at 'AAA(slv)';
--Corporate bonds of USD200 million at 'AAA(slv)'.