S&P Global Ratings on March 30 affirmed Banco Monex SA Institución de Banca Múltiple Monex Grupo Financiero's global scale ratings at BB+ and B, and its national scale ratings at mxA and mxA-1.
The bank's stand-alone credit profile remains at "bb+."
The bank's ratings reflect its leading position and geographic diversification in the foreign exchange segment, though it has a small market share in credits and deposits in Mexico's banking industry, the rating agency noted. The bank's foreign exchange income has increased in recent years, supported by high market volatility.
S&P said that it expects Banco Monex's risk-adjusted capital ratio will stand at about 10.5% for the next two years, reflecting a capital injection and the bank's internal capital generation, despite loan growth that will likely be aggressive. The bank only accounted for 0.43% of the market in terms of loans, and 0.7% in deposits, as of January. Meanwhile, S&P considers Banco Monex's asset quality metrics, particularly its nonperforming assets, as stronger than the banking system average.
However, the bank has a concentrated portfolio and more dollar-denominated loans than the industry average. Its stable funding ratio is also lower than the industry average. Nevertheless, its liquidity benefits from a manageable debt maturity profile that results in low refinancing risk.
S&P Global Ratings and S&P Global Market Intelligence are owned by S&P Global Inc.