Fitch Affirms Banco BHD's Ratings; Outlook Stable.NEW YORK New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of -- Today, Fitch Ratings Fitch Ratings An international rating agency for financial institutions, insurance companies, and corporate, sovereign, and municipal debt. Fitch Ratings has headquarters in New York and London and is wholly owned by FIMALAC of Paris. has affirmed the following Dominican Republic-based Banco BHD BHD In currencies, this is the abbreviation for the Bahraini Dinar. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. ('BHD') ratings: --Long term foreign and local currency Issuer Default Ratings (IDR IDR In currencies, this is the abbreviation for the Indonesian Rupiah. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. ) at 'B'; --Short-term at 'B'; --Support at '5'; --Individual at 'D'. In addition, Fitch has affirmed BHD's Long Term National Rating and Short Term National Rating at 'A(dom)' and 'F-1(dom)'. The Outlook for the Issuer Default rating ('IDR') is Stable. BHD ratings reflect its diversified retail deposit base, significant market share, adequate liquidity, competent management and its robust shareholder structure. Despite its recent improvement, asset quality and profitability ratios Profitability ratios Ratios that focus on how well a firm is performing. Profit margins measure performance with relation to sales. Rate of return ratios measure performance relative to some measure of size of the investment. still compare weakly by international standards, as well as its thin capital levels within a competitive operating environment. BHD's conservative management and the benefits of a less volatile operating environment have allowed the bank to enhance most of its performance ratios, although burdens imposed by lower interest rates and high overheads still affect the banks profitability ratios. Despite a dramatic increase to 1.6% in BHD's ROAA ROAA Return on Average Assets (business, banking, accounting) ROAA Rural Oregon Arts Association ROAA Royce Online Account Access (Royce Fund Services, Inc. at the end of 2005 from less than 1% during 2004, this ratio still ranks lower than the market average. The overhaul of the risk management area, more successful collection efforts and the positive results of the bank's conservative approach towards lending have sustained a positive improvement in BHD's asset quality ratios. After a peak of 9% of total loans at the end of 2004, impaired loans (including installments in arrears) have improved to 4.6% of total loans at the end of March 2005, while loan loss reserves covered more than 180% the impaired portfolio, one of the highest levels among Dominican banks. After a significant increase in 2004, BHD's securities portfolio has represented a significant part of total assets, reaching 32% of total assets in 2005 (26% in 2004). A significant portion of the portfolio is comprised of Central Bank securities which represented 1.2 times (x) equity at that date, similar to its competitors but considered high in view of the low sovereign rating (LTLC: B) and its decreasing yields. Conservative cash dividends, slow asset growth, and subordinated debt Subordinated Debt A loan (or security) that ranks below other loans (or securities) with regard to claims on assets or earnings. Also known as "junior security" or "subordinated loan". holdings (USD USD In currencies, this is the abbreviation for the U.S. Dollar. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. 20MM) have benefited BHD's capital ratios. At the end of March 2006, BHD had an equity to assets ratio of 8.8% and a total capital ratio of 14.7%. However, the significant burden imposed by the bank's holding of fixed and foreclosed assets (70% in total at the end of March 2005) and some revaluations of fixed assets, diminishes the quality of the aforementioned ratios. As of March 2006, BHD ranked third out of 12 commercial banks, with a 13% market share by total assets. Grupo BHD controls 60% of Centro Financiero BHD, the bank's holding company is one of the largest economic groups in the Dominican Republic. BHD enjoys close cooperation with Banco Sabadell of Spain and Banco Popular de Puerto Rico (Popular PR), who together control the remaining 40% of Centro Financiero BHD. BHD's ownership structure is unique among Dominican banks, which allows it to benefit from close cooperation with its foreign shareholders. Fitch's rating definitions and the terms of use Terms of Use are rules set up by the owner of an intellectual property or service to govern how they may be legally used. In many cases, terms of service are used as a contractual agreement between a company and users of a service they provide. 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. 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