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S&P upgrades Peru's Interbank on stronger capitalization

S&P Global Ratings on Dec. 15 raised its long-term issuer credit rating on Banco Internacional del Perú SAA, or Interbank, to BBB from BBB- and revised the bank's stand-alone credit profile to "bbb-" from "bb+."

The upgrades reflect Interbank consistently strengthening its capitalization due to sound internal capital generation, while maintaining solid asset quality metrics.

S&P forecasts the lender's risk-adjusted capital ratio before diversification and concentration adjustments at about 7.3% in the next 18 to 24 months. This projection takes into account expectations for loan growth of about 6% in 2016 and 15% in 2017, relatively stable net interest margins, low expense growth in 2016, and slightly higher provisions, among other assumptions.

The issuer credit rating on Interbank reflects its adequate business position as the fourth-largest financial institution in Peru, as well as its adequate capital, earnings and risk position. The rating also considers the company's average funding and adequate liquidity, S&P noted.

The rating also reflects a one-notch uplift as S&P believes there is a moderately high probability that Peru's government would provide support to Interbank if the lender experiences credit stress.

S&P Global Ratings and S&P Global Market Intelligence are owned by S&P Global Inc.