KEY RATING DRIVERS - IDRs,
MB's viability rating (VR) drives its Long-term IDR and national ratings. The bank's risk appetite for growth and capitalization levels highly influences its
MB has emerged as a relevant contender in the middle market and retail segments in
Resilient margins and growing loan volumes coupled with moderate credit costs allowed MB to post moderate but consistent profitability ratios. MB will need further income diversification and cost control to face competition and rising interest rates.
Sound credit origination, adequate remedial management and a positive operating environment underpinned asset quality. Past due loans (PDLs) for 90-plus days stood at approximately 1% at YE13 and are well covered by reserves. Concentration on both sides of the balance sheet is moderate after years of continuous improvement.
The overhauled commercial strategy helped widen the deposit base while changing the deposit mix and lowering funding costs. MB's liquidity remains sound and is supplemented by adequate contingency plans. However, the increase of longer-tenor loans creates the need to further diversify funding to prevent undesired asset/liability gaps in a highly competitive market that could create pressures to become more aggressive in credit or pricing.
As the Panamanian economy boomed, MB grew into retail and SME but also found opportunities arising from the consolidation at the top of the market. Accordingly, MB gained in market share and diversified and strengthened its balance sheet. Moreover, the bank has embarked on an expansion abroad leveraging its expertise in SME and consumer sectors.
KEY RATING DRIVERS: SUPPORT RATING AND SUPPORT RATING FLOOR
The banks' Support Rating (SR) of '5' and Support Rating Floor (SRF) of 'NF' reflect Fitch's expectation of no support. As a longstanding dollarized economy,
RATING SENSITIVITIES -
A sustained improvement in the bank's capital position (
SUPPORT RATING AND SUPPORT RATING FLOOR
Given Fitch's view of
Fitch has affirmed MB's ratings as follows:
--Long-term IDR at 'BB+'; Outlook Stable;
--Short-term IDR at 'B';
--Viability Rating at 'bb+';
--Support Rating at '5';
--Support Rating Floor at 'NF';
--National scale long-term rating at 'AA-(pan)'; Outlook Stable;
--National scale short-term rating at 'F1+(pan)'.
Additional information is available at 'www.fitchratings.com'.
--'Global Financial Institutions Rating Criteria' (
--'National Ratings Criteria' (
--'Assessing and Rating Bank Subordinated and Hybrid Securities' (
Global Financial Institutions Rating Criteria
National Scale Ratings Criteria
Assessing and Rating Bank Subordinated and Hybrid Securities Criteria
Source: Fitch Ratings
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