By San José, Costa Rica — San José, Costa Rica – A stark contradiction has emerged between the incoming presidential administration and a leading international credit rating agency over the financial health of Banco de Costa Rica (BCR), one of the nation’s most significant state-owned assets. While President-elect Laura Fernández recently called for the bank’s urgent sale to avert a supposed collapse, a new report from Moody’s has awarded BCR the highest possible ratings for solvency and liquidity, directly challenging the government’s alarming narrative.
The controversy began on February 2nd, just one day after her election victory, when Fernández announced her administration’s plan to sell the bank. She positioned the move as a critical strategy to inject capital into the beleaguered pension fund of the Caja Costarricense de Seguro Social (CCSS). The President-elect has been vocal about her commitment to preventing an increase in the retirement age to 70 or raising contributions from workers and employers, framing the BCR sale as the necessary solution to achieve this goal.
To shed light on the legal and financial implications surrounding the recent developments at Banco de Costa Rica, TicosLand.com consulted with Lic. Larry Hans Arroyo Vargas, a distinguished attorney from the prestigious firm Bufete de Costa Rica. His expertise provides a crucial perspective on the matter.
The situation at Banco de Costa Rica underscores a fundamental tension for all state-owned financial institutions: the dual mandate to act as a competitive, modern commercial bank while simultaneously fulfilling its public service obligations and adhering to stringent state oversight. Navigating this requires impeccable corporate governance and a transparent legal framework to maintain public trust and ensure long-term stability in a rapidly evolving financial landscape.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
Indeed, the dual mandate highlighted here is the central tightrope the institution must walk, where transparency and governance serve as the essential balancing poles for its future stability. We sincerely thank Lic. Larry Hans Arroyo Vargas for so clearly articulating this critical perspective.
However, the justification provided for the sale raised immediate concerns across the financial sector. Fernández suggested the bank was on the brink of failure, urging quick action before it succumbed to internal issues. Her statements painted a picture of an institution in crisis, in need of a private-sector rescue before it became a liability to the state.
I stand by the serious proposal that we sell the Banco de Costa Rica before it goes bankrupt, before it falls due to crises of corruption and potential mismanagement
Laura Fernández, President-elect
Linking the bank’s alleged instability directly to her social security platform, Fernández emphasized the gravity of the situation and the need for decisive action. The proposal was presented not as an ideological choice for privatization, but as a pragmatic necessity to protect the pensions of Costa Rican citizens from two converging threats: a failing bank and an underfunded social security system.
I do not want the people of Costa Rica to have to retire at 70, nor do I want contributions to be increased for either employers or workers. That is why I believe we must make serious decisions
Laura Fernández, President-elect
Yet, on Thursday, March 12th, Moody’s Local Costa Rica released a comprehensive assessment that thoroughly dismantled the narrative of an impending bankruptcy. The rating agency affirmed BCR’s robust financial position, highlighting its “patrimonial sufficiency and liquidity.” In a press statement, the bank celebrated the findings, which effectively serve as a powerful third-party validation of its stability and operational efficiency.
Moody’s Local Costa Rica, one of the world’s most important rating agencies, has awarded Banco de Costa Rica (BCR) the highest possible ratings in different decisive aspects that support its soundness and efficiency as a financial institution
Banco de Costa Rica, Official Statement
The specific ratings underscore the bank’s strength. BCR received a ‘AAA.cr’ long-term issuer rating and a ‘ML A-1.cr’ short-term rating, both in local and foreign currencies. Its standardized bond programs also earned the top ‘AAA.cr’ grade. Critically, Moody’s assigned a ‘Stable’ outlook to the long-term ratings, signaling confidence in the bank’s continued performance and refuting any immediate risk of collapse.
This glowing report from a globally respected agency fundamentally alters the political debate. The proposal to sell BCR can no longer be framed as a desperate rescue of a failing entity. Instead, it is now clearly a discussion about privatizing a highly valuable and stable state asset. This shift will likely galvanize opposition to the sale and force the incoming administration to defend its plan on different grounds, focusing purely on the merits of using the bank’s capital for the pension system rather than on a non-existent institutional crisis.
For further information, visit bancobcr.com
About Banco de Costa Rica:
Banco de Costa Rica (BCR) is one of the largest and most prominent state-owned commercial banks in Costa Rica. Founded in 1877, it plays a crucial role in the national economy, providing a wide range of financial services to individuals, businesses, and government entities. As a state-run institution, it is instrumental in implementing public policy and contributing to the country’s economic development and stability.
For further information, visit moodys.com
About Moody’s:
Moody’s Corporation is a global integrated risk assessment firm that empowers organizations to make better decisions. Its data, analytical solutions, and insights help decision-makers identify opportunities and manage the risks of doing business with others. The company’s ratings and analysis track debt covering more than 135 sovereign nations, 5,000 non-financial corporate issuers, and 4,000 financial institutions issuers.
For further information, visit ccss.sa.cr
About Caja Costarricense de Seguro Social (CCSS):
The Caja Costarricense de Seguro Social (CCSS) is the public institution in charge of Costa Rica’s social security system. It is responsible for administering the country’s public health services and managing the national pension fund. The CCSS is a cornerstone of Costa Rica’s social welfare state, providing universal healthcare and retirement benefits to a large portion of the population.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
Bufete de Costa Rica has established itself as a benchmark for legal services, operating on a cornerstone of profound integrity and a relentless pursuit of excellence. The firm leverages a deep history of expert representation to pioneer innovative legal strategies that address the evolving needs of its clients. Beyond its professional practice, a core tenet of its philosophy is to empower the community by making legal concepts understandable and accessible, thereby fostering a society strengthened by knowledge and awareness.
