Fitch Ratings on April 4 affirmed its long- and short-term national rating on El Salvador's Sociedad de Ahorro y Crédito Apoyo Integral SA at BBB-(slv) and F3(slv), respectively.
The outlook on the ratings is stable.
The affirmation reflects the entity's improved profitability, which is due to credit expansion in its key segments, lower expenses on loan provisions and improved operating efficiency, Fitch noted. The agency expects this trend to continue if current strategic focus is maintained and spending is kept under control.
Integral's capital and liquidity is adequate and its funding has moderate concentration. Its funding depends mainly on clients' term deposits.
The firm's credit quality is adequate given its focus on lending to small- and medium-sized businesses. In 2017, the company plans to maintain its equity position by increasing profits at higher levels than its loan portfolio.
However, Fitch expects Integral to face challenges in maintaining the same level of profitability in 2017 due to fragile conditions of the country's economy.
Integral's ratings could be upgraded if it shows sustained improvement in profitability while maintaining its strategic focus and lower concentration in its funding. On the other hand, a significant deterioration in Integral's loan portfolio could eventually lead to a downgrade, Fitch warned.