S&P Global Ratings on Dec. 8 affirmed Banco Agromercantil de Guatemala SA's long- and short-term global scale issuer credit ratings at BB and B, respectively, with a negative outlook.
The bank's ratings continue to reflect its adequate business position given its solid market share in the Guatemalan banking sector, and its moderate risk position based on a still high dollar-denominated loan portfolio compared to the system's average.
The ratings also incorporate S&P's assessment of the lender's funding as average and liquidity as adequate. The rating agency forecasts a risk-adjusted capital ratio for the bank of 6.9% on average for 2017 and 2018.
Banco Agromercantil's stand-alone credit profile remains at "bb."
Despite a slight increase in nonperforming assets, the bank's asset-quality metrics remain at manageable levels, similar to those of its most immediate peers. The company is not exposed to significant refinancing risks in the short term due to its prudent liquidity management, S&P added.
The rating agency noted that it expects Banco Agromercantil's internal capital generation to compensate for modest portfolio growth and a high dividend payout.
S&P Global Ratings and S&P Global Market Intelligence are owned by S&P Global Inc.