Fitch Ratings on Dec. 15 affirmed Mercantil Servicios Financieros C.A.' long- and short-term national ratings at A+(ven) and F1+(ven), respectively.
The rating action followed Fitch's recent action on the company's main subsidiary Mercantil C.A. Banco Universal.
"With this rating action, Fitch has closed a one notch difference with Mercantil SF's main subsidiary," Fitch said.
Despite a challenging economic environment and regulatory restrictions on dividend payments, the rating agency believes that the holding has taken measures to manage its liquidity and lower its dividend dependence on the bank to meet its liquidity needs. Thus, Mercantil SF's long-term ratings remain at the same level of its parent.
"Complex regulations in Venezuela related to financial activity, exchange market and other provisions, constitute different barriers to a free capital movement within the group. However, Mercantil SF has taken appropriate measures to mitigate these limitations," Fitch said.
Nevertheless, Fitch believes that further improvements in Mercantil SF's profitability levels will be conditioned by regulatory controls and a less favorable operating environment for its companies in Venezuela.
Fitch believes that maintaining the company's provisions for loan losses at a stable level is "a key element" in the challenging operating environment, especially in Venezuela. The rating agency also expects the company's liquidity ratios to remain adequate, given its diversified funding structure.