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S&P assigns ratings to Bangladesh-based BRAC Bank

S&P Global Ratings assigned Bangladesh-based BRAC Bank Ltd. long- and short-term issuer credit ratings of B+ and B, respectively.

The outlook on the long-term rating is stable, the rating agency said in a Feb. 26 report.

The ratings reflect the bank's improving franchise, sufficient asset quality and funding, and earnings that are above the industry average. These factors are however offset by its lower capitalization compared to its global peers.

S&P expects the Bangladeshi lender to maintain its satisfactory market position and business stability over the next 12 to 18 months.

The stable outlook also reflects the view that the bank will cope steadily with competitive operating conditions in Bangladesh and maintain its financial profile over the same period.

A material decline in the bank's asset quality, due potentially to its corporate or unsecured loans, could lead to a negative rating action. Conversely, S&P could upgrade the lender's ratings if it raises capital to effectively maintain its pre-diversification risk-adjusted capital ratio above 5%.

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