- Lender's rating cut back to neutral after upgrade in July
- Delinquency rates rise in Colombia as lending slows: JPMorgan
Bancolombia SA fell to a three-week low after JPMorgan Chase & Co. cut its buy rating on shares of Colombia’s largest bank, citing expectations for a slowing economy to boost losses on loans.
“A worsening credit quality cycle has arrived in Colombia,” New York-based analyst Saul Martinez wrote in a note to clients in which he changed his recommendation to hold. “Colombian banks are susceptible to rising delinquency rates and increasing loan losses.”
The Medellin-based bank’s American depositary receipts fell 3.4 percent to $34.95 at 2:18 p.m. in New York, poised for the lowest closing price since Oct. 2.
JPMorgan lowered its target price for the ADRs to $40 by the end of next year from $47. The U.S. lender now has a “slight preference” for Colombian banking group Grupo Aval Acciones y Valores SA, which might have more resilient earnings, Martinez wrote.
JPMorgan had upgraded Bancolombia to overweight in July.