Banco General outlook stable
Global rating agency Fitch today affirmed Banco General S.A.’s (BG) long-term foreign currency Issuer Default Rating (IDR) at ‘BBB+’.
BG’s Viability Rating (VR), which underpins its IDR, reflects the bank’s solid franchise, sound and consistent performance, robust capital levels, conservative policies, good asset quality and reserves, ample deposit base and well diversified portfolio. Fitch’s view of BG’s creditworthiness is tempered by the heightened competition it faces and the lack of a lender of last resort.
A long-standing dollarized economy, Panama lacks a lender of last resort. Banco Nacional de Panama, the largest state controlled bank, could only provide temporary liquidity loans. In Fitch’s opinion, external support for BG cannot be relied upon, underpinning the bank’s support rating of ‘5’ and support rating floor of ‘NF’.
Healthy and balanced growth within generally stable environ- ments will underpin BG’s ratings as it expands abroad and faces strong competition at home.
Should asset quality decline sharply, performance weaken or capitalization deteriorate, BG’s ratings could face some downward pressure.
Banco General S.A. is Panama’s largest locally owned bank. It has one of the largest branch networks, presence in most market segments, a significant market share, and a reputation for conservative and consistent policies. BG has been perceived as a safe heaven in times of local stress.
Steady growth, low cost deposits, and sound asset quality contribute to BG’s stable performance that reflects high efficiency and sound profitability. BG’s performance metrics compare quite well to those of the region’s top banks with similar VRs. Armed with a strong capital base that is little encumbered by goodwill or fixed assets, BG enjoys an ample cushion against unexpected losses on top of adequate loan loss reserves. This sound balance sheet structure underpins BG’s ratings.