S&P Global Ratings on Dec. 20 affirmed its ratings on Banco G&T Continental SA, pointing to the bank's strong market position as one of the biggest financial institutions in Guatemala.
S&P affirmed the bank's long- and short-term global scale issuer credit ratings at BB- and B, respectively, with a stable outlook. The lender's stand-alone credit profile remains at "bb."
The rating agency projects a risk-adjusted capital ratio of 5.2% for the bank over the next two years, based on an expected $40 million capital injection from shareholders in the first quarter of 2018 and no dividend payments in 2017.
Persistent political volatility and weak government institutions in Guatemala have limited the growth of Banco G&T's loan portfolio, S&P said, but the bank's deposit-based funding is a key strength that allows it ample liquidity to meet short-term obligations.
Although the lender's asset quality ratios have deteriorated, S&P still considers them to be manageable.
The sovereign ratings on Guatemala limit those on Banco G&T because the rating agency does not believe the company would withstand a stress scenario for capital and liquidity, given its considerable exposure in the country.
S&P Global Ratings and S&P Global Market Intelligence are owned by S&P Global Inc.
