Banco Gen­eral out­look sta­ble

The Pak Banker - - Front Page -


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.

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