Banco de Occidente ratings affirmed by Fitch with stable outlook

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Banco de Occidente Ratings Affirmed

Highlights

Fitch affirms Banco de Occidente's long-term issuer default ratings at 'BB' with a Stable Outlook, maintaining all core ratings and those of its subsidiaries unchanged.
Banco de Occidente's asset quality holds steady, with loans over 90 days past due at 2.6% of total loans in H1 2026, versus a 3.1% average in 2022–2025.
Total operating income rises nearly 27% year over year to about $630.5 million in H1 2026, with a loan-to-deposits ratio of 92.5% and CET1 at 10.6%.

Fitch affirms core ratings and outlook

As reported by Fitch Ratings, Banco de Occidente S.A.'s foreign- and local-currency long- and short-term issuer default ratings remain at 'BB' and 'B', while its viability rating stays at 'bb' and its shareholder support rating at 'bb'. The rating agency also affirms the bank's subordinated debt at 'B+', Banco de Occidente Panama's long-term issuer default rating at 'BB' and shareholder support rating at 'bb', with a Stable Outlook on the long-term issuer default ratings.

Fitch also maintains Banco de Occidente's national long- and short-term ratings at 'AAA(col)' and 'F1+(col)'. Occidental Bank (Barbados) Ltd. keeps its national scale ratings at 'AA+(col)' and 'F1+(col)', and the outlook on the long-term national scale ratings is also stable.

The agency says the ratings continue to be driven by Banco de Occidente's standalone credit profile, which it links to the Colombian sovereign rating. Fitch highlights the lender's specialized business model, position as Colombia's fifth-largest bank, controlled asset quality, stable profitability, consistent deposit base and access to funding.

Asset quality and capital shape outlook

Fitch expects Banco de Occidente's asset quality to remain stable over the rating horizon, supported by its commercial loan focus, credit controls and moderate debtor concentration. At the first half of 2026, loans more than 90 days past due represent 2.6% of total loans, compared with a 2022 to 2025 average of 3.1%.

Profitability remains moderate but consistent, with operating profit to risk-weighted assets at 1.6% in the first half of 2026, versus 1.2% at year-end 2025. Total operating income reaches about $630.5 million in the first half and rises nearly 27% year over year, while common equity tier 1 to risk-weighted assets stands at 10.6%, slightly below 10.8% at year-end 2025.

On funding, Fitch points to a solid customer deposit base and a loan-to-deposits ratio of 92.5% in the first half of 2026, below the 2022 to 2025 average of 99.3%. The agency adds that downside pressure would come from a weaker operating environment, sovereign downgrade, lower profitability or deterioration in funding and liquidity, while an upgrade remains unlikely in the medium term given the Stable Outlook on Colombia's sovereign rating and operating environment constraints.

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