Fitch Ratings on Oct. 3 upgraded Banco Monex SA and Monex Casa de Bolsa SA de CV's long- and short-term national scale ratings to AA-(mex) and F1+(mex) from A+(mex) and F1(mex), respectively.
The long-term rating on ultimate parent Monex SAB de CV was raised to A+(mex) from A(mex), with a stable outlook on all three companies.
The upgrade on Banco Monex reflects the Mexican bank's well-positioned franchise in the foreign exchange and international payments business, as well as a financial profile that compares favorably to national peers. The bank has shown consistent profitability, strong loss-absorption capacity and reasonable liquidity levels throughout various economic cycles, Fitch said.
Monex Casa de Bolsa's upgrade mirrors the action on Banco Monex as the former's credit quality is aligned with that of the bank.
However, the rating agency noted that Banco Monex has a higher risk appetite than other Mexican banks and has significant exposure to corporate bonds, "which are susceptible to higher default rates."
Still, Fitch expects the bank to "maintain robust and resilient capital metrics despite the less benign operating environment."
