Fitch Ratings on Oct. 18 downgraded the long-term national ratings of Banco Abank SA, formerly known as Banco Azteca El Salvador SA, to BBB(slv) from AA(slv) and short-term ratings to F3(slv) from F1+(slv).
Fitch also resolved its Rating Watch Negative observation on the bank and assigned it a stable outlook.
The ratings action comes after Perinversiones SA de CV finalized its purchase of the bank from Grupo Elektra SAV de CV following approvals from local regulators. As part of the transaction, the bank changed its legal name on Aug. 26.
Due to the deal, Grupo Elektra has stopped providing support to Banco Abank, which was the basis of the bank's previous ratings.
Banco Abank's ratings reflect its intrinsic credit profile, which is highly influenced by its company profile characterized by a modest franchise and low profitability, Fitch said. However, the bank's profile is also moderately anchored on a robust loss absorption capacity and a risk appetite that, although high, is still in line with its business model.
In addition, the bank has limited financial flexibility despite a granular retail deposit base. On a positive note, it maintains robust capitalization and high liquidity levels, Fitch said.