S&P rates Banco Schahin notes B

Standard & Poor's said it assigned its B foreign-currency long-term senior unsecured debt rating to Banco Schahin SA's $15 million notes issued on Tuesday and maturing in 18 months.

The counterparty credit rating on Banco Schahin SA (B/stable/B) reflects the intrinsic risks of a small bank facing the challenge of growing its business while maintaining adequate funding in the increasingly competitive banking market, the weak credit quality of its remaining wholesale portfolio and the margins pressure related to retail lending.

These risks are offset by the bank's coherent strategy to generate more retail business while gradually reducing the weight of loans to small and midsize companies, the improvement in credit quality and profitability through the increase of its retail operations and the conservative approach of its Treasury activity, S&P said.

S&P said it does not assign ratings to any industrial or service company part of Schahin's conglomerate and the ratings assigned to the bank do not incorporate potential support from shareholders.

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