S&P downgrades Banco Agricola

S&P said it lowered the long-term issuer credit rating on Banco Agricola SA to B from B+.

The bank’s B short-term credit rating is unchanged, but all of the ratings remain on CreditWatch negative.

S&P also said it maintained the Bicra score on El Salvador at group 7, along with the 8 economic risk score and 6 industry risk score, which anchor the bank’s operating rating in the country at BB .

The agency said it revised the trend on El Salvador’s Bicra economic risk to negative from stable based on the extremely challenging economic conditions in the country as a result of concerns over the sovereign’s access to liquidity and limited flexibility to maneuver on its debt management.

This is due to political polarization between the governing party Frente Farabundo Martí para la Liberacion Nacional and the main opposition party, Alianza Republicana Nacionalista, S&P said.

This leads to an opinion that El Salvador’s institutional and governance effectiveness is weakening, the agency said.

A potential increase in economic imbalances could raise economic risk further in the country, S&P added.

The ratings on Banco Agricola continue to reflect its strong business position based on its leading position in El Salvador’s banking industry, the agency said, and its adequate capital and earnings.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.