The National Ratings of Banrural and its subsidiaries
Today's rating actions follow Fitch's recent downgrade of
KEY RATING DRIVERS - IDRS AND VR
Banrural's IDRs are driven by its
Banrural maintains a strong local franchise underpinned by its high market share; ample geographic coverage and unique capacity to provide products and services adapted for its main clients. The bank's experience in the micro-finance segment results in good delinquency metrics, comparable with its corporate oriented peers. Banrural's non-performing loan to total loans ratio remains below 1% while reserves coverage is adequate, above 2% of total loans as of
The bank's profitability is above similarly rated peers, boosted by its ample net interest margin. The bank's low funding cost and higher interest income compensate for its weaker efficiency levels and lower income diversification.
Banrural's capital levels continue comparing positively with its main local peers and similarly rated international banks. In Fitch's opinion, the bank's capitalization will remain sufficient to sustain growth, underpinned by strong internal capital generation and moderate dividends payments.
RATING SENSITIVITIES - IDRS AND VR
Fitch has revised Banrural's Outlook to Stable to be consistent with the Sovereign's Outlook. Changes in the Sovereign rating may result in similar rating actions on Banrural's
KEY RATING DRIVERS - SUPPORT RATING AND SUPPORT RATING FLOOR
Banrural's support rating (SR) of '3' reflects Fitch's opinion that there is a moderate probability of support from the state, given its systemic importance in the banking system.
Banrural's SR and support rating floor (SRF) indicate that in the event of individual risk-profile deterioration, the IDR would not fall below 'BB-', given the agency's opinion that government support will be forthcoming.
The current support rating floor ('BB-'), one notch below the sovereign rating, is explained by the moderate financial flexibility of the government to provide support to systemically important banks in the country and the significant presence of foreign currency funding.
RATING SENSITIVITIES - SUPPORT RATING AND SUPPORT RATING FLOOR
Banrural's support SR and SRF are sensitive to changes in the sovereign rating.
NATIONAL RATINGS - UNAFFECTED
The national scale ratings of Banrural and its above mentioned subsidiaries are unaffected by the review of
Fitch has taken the following rating actions:
--Local Currency Long-term IDR downgraded to 'BB' from 'BB+'; Outlook Stable;
--Viability Rating downgraded to 'bb' from 'bb+';
--Support Rating affirmed at '3';
--Support Rating Floor affirmed at BB-';
--Local Currency Short Term Issuer Default Rating affirmed at 'B'.
No action has been taken on the following national scale ratings:
--National Long Term Rating at 'AA+(gtm)', Outlook Stable;
--National Short Term Rating at 'F1+(gtm)'.
--National Long Term Rating at 'AA+(gtm)';
--National Short Term Rating at 'F1+(gtm').
--National Insurance Financial Strength at 'AA+(gtm)'.
Additional information is available on www.fitchratings.com
--'Fitch Downgrades Guatemala's Ratings to 'BB'; Outlook Revised to Stable' (
--'Global Financial Institutions Rating Criteria' (
--'National Scale Ratings Criteria' (
Global Financial Institutions Rating Criteria
National Scale Ratings Criteria
Primary Analyst (Banrural)
Secondary Analyst (Banrural)
+503 2516 6616
Primary Analyst (Aseguradora Rural)
+503 2516 6620
Primary Analyst (
+503 2516 6613
Source: Fitch Ratings
Most Popular Stories
- McDonald's Packages Coffee for National Distribution
- Parents Opt to Keep Baby Photos off Facebook
- HTC Makes Windows Version of Flagship One Phone
- Sprint Cancels Framily, Rolls Out New Data Pricing Plan
- Rising U.S. Consumer Prices Slowed Down in July
- Home Depot Builds Nice Net Income in Q2
- Mike Brown Death Timeline
- Student Entrepreneurs Get a Leg Up in Philly
- Taylor Swift is a Country Dweller No More
- Rising Freight Prices Signal Global Recovery