Bermuda Commercial Bank’s (BCB) rating outlook has been revised to negative from stable by Fitch Ratings over concerns about risks in its investment portfolio and exposure to European markets.Fitch also affirmed the long and short-term IDRs of the bank at ‘BBB-/F3’.Fitch said its ratings continued to reflect BCB’s comfortable liquidity and strong capital position. Conversely, they remain constrained by the bank’s small size and limited diversity.The negative outlook was driven by concerns regarding concentration risks principally in BCB’s investment portfolio. Other concerns include relatively high individual exposures as well as concentrations in Europe and the financial institution sector.While these risks still appear manageable in Fitch’s view, they also potentially subject BCB to higher relative risk versus prior years. Given BCB’s business focus on various private banking and corporate services, total loans remain a modest portion of total assets.After a change in ownership in mid-2010, BCB resumed normalised operations. Since that time, BCB has posted considerable customer deposit growth, improved level of overall customer activity and higher core profitability. That said, Fitch pointed out that work still needed to be done to build up BCB’s revenue stream and core earnings. The recent acquisitions of Paragon Trust and Charter Corporate Services have the potential to significantly increase fee income in the coming year, said the ratings agency.Fitch may downgrade BCB if concentration risks in the investment portfolio remain at current levels or increase. Other potential rating drivers include: any considerable reduction in liquidity or capital ratios, significant increases in credit or market risks and/or any acquisition which results in a shift towards a riskier business mix.