Fitch Ratings on Dec. 15 affirmed MMG Bank Corp.'s long- and short-term national rating at AA-(pan) and F1+(pan), respectively, with a stable outlook on the long-term rating.

In its affirmation, Fitch said it considered MMG's higher asset quality compared with its peers and the Panamanian banking system. The company's loan portfolio shows an upward trend and non-past due loans have benefited from its financial performance since "its deterioration costs are not material so far," Fitch said.

The rating agency also highlighted the bank's investment portfolio that consists of financial instruments with investment grade and good geographical diversification, which contribute positively to the bank's performance.

The bank's ratings, however, are limited by its scale and market share, given its small size within the Panamanian financial system and structural limitations tied to the number of its clients and the concentration of its debtors and depositors.

Nevertheless, Fitch says the bank's 16.6% capital base compares favorably within the Panamanian market and is adequate in relation to the main risks of its balance sheet, despite a recent decrease due to regulatory changes. "Fitch believes that the bank's capitalization will remain at similar levels on the rating horizon and are robust enough to absorb unexpected losses and support its growth targets," Fitch noted.