Moody's could cut Bancolombia

Moody's Investors Service said it placed the ratings of Bancolombia SA on review for downgrade following the bank's Feb. 19 announcement that it will acquire 100% of ordinary shares and 90.1% of preferred shares of the Panamanian operations of HSBC Bank (Panama), SA.

Bancolombia expects to complete the acquisition, which also includes HSBC Panama's insurance, leasing, trust and asset management, and brokerage subsidiaries, in the third quarter of 2013, subject to regulatory approvals.

Moody's said the review for downgrade was placed on Bancolombia's D+ standalone bank financial strength rating and Baa3 standalone baseline credit assessment and the bank's Baa2 and Prime-3 long- and short-term global local currency deposit ratings, Baa3 and Prime-3 long- and short-term foreign currency deposit ratings, Baa2 long term foreign currency senior debt ratings and Ba1 long term foreign currency subordinated debt ratings.

The review for downgrade reflects the potential negative pressure on Bancolombia's capital, liquidity and profitability as a result of its planned acquisition of HSBC Panama, the second largest banking group in Panama, the agency said.

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