Fitch Ratings on Dec. 11 removed Consubanco SA Institución de Banca Múltiple's ratings from Negative Watch and assigned a negative outlook to the bank's long-term ratings.
At the same time, Fitch affirmed the bank's long-term foreign and local currency issuer default ratings at BB-, viability rating at "bb-," and long-term national scale rating at A-(mex).
The removal from Rating Watch Negative reflects "the recent lessening of Consubanco's immediate liquidity pressures and refinancing risk," Fitch said, adding that the lender has taken measures to manage its closest debt maturities in a relatively short amount of time.
Those actions include the issuance of two additional local senior unsecured debt notes of 1.5 billion Mexican pesos that will partly be used to pay notes due in late 2017 and the next set due March 2018.
However, the newly assigned negative outlook reflects high risk appetite in terms of Consubanco's liquidity management. The company "has yet to demonstrate a commitment to reduce its risk appetite through liquidity management," the rating agency said.
Despite those issues and the highly competitive environment in which the bank operates, it still has a strong position within the payroll-deductible loans segment and benefits from solid financial performance, well-contained asset quality metrics and a reasonable capital adequacy position.
As of Dec. 11, US$1 was equivalent to 18.97 Mexican pesos.
