S&P trims Socram Banque

S&P said it lowered its long-term issuer credit rating on Socram Banque to BBB from BBB+ and affirmed the A-2 short-term issuer credit rating on the bank.

The outlook is negative.

The rating action reflects the bank's narrow focus on auto financing and a weakening of its distribution network, as shown by a continuous erosion of its credit portfolio over the past four years, S&P said.

“We expect the business uncertainty now stemming from the Covid-19 pandemic will further weigh down Socram's business activities in 2020 and therefore adds further uncertainties to the execution of Socram's transformation,” S&P said in a news release. “In addition, lower client activity will weigh on earnings prospects and already modest profitability.”

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