S&P Global Ratings on Dec. 20 upgraded the short- and long-term national scale issuer credit ratings of both Banco Sabadell SA Institución De Banca Múltiple and its subsidiary Sabcapital SA De CV Sofom ER to "mxAA" from "mxA+" and to "mxA-1+" from "mxA-1", respectively.
Banco Sabadell México's new rating reflects market share consolidation, an upswing in revenue, the solid performance of its credit portfolio and effective risk and origination policies, which have enabled better quality of assets than its competitors.
The rating outlook was changed from developing to negative, however, with S&P Global Ratings pointing to the possibility of a deterioration in the economic risk associated with the Mexican banking sector, as well as the lack of explicit support from Spanish parent company Banco Sabadell SA with regard to the provision of additional capital.
S&P Global Ratings expects the average risk-adjusted capital ratio for the bank to be 11.8% for 2019-2020, and profits for the current year to top 450 million Mexican pesos.
As of Dec. 20, US$1 was equivalent to 18.91 Mexican pesos.
This S&P Global Market Intelligence news article may contain information about credit ratings issued by S&P Global Ratings. Descriptions in this news article were not prepared by S&P Global Ratings.