Fitch Affirms Banco Internacional del Peru S.A.A. at 'BBB+'; Outlook Stable

jueves 21 de mayo de 2015 17:04 GYT
 

(The following statement was released by the rating agency) NEW YORK, May 21 (Fitch) Fitch Ratings has affirmed Banco Internacional del Peru S.A.A.'s (Interbank) viability (VR) and Issuer Default Ratings (IDRs) at 'bbb+' and 'BBB+', respectively. A full list of rating actions follows at the end of this press release. KEY RATING DRIVERS VR, IDRs AND SENIOR DEBT Interbank's VR and IDR ratings are driven by its consistent, strong performance; robust credit process; good asset quality; sound franchise; adequate capital; stable economic and regulatory environment; and improving funding base. The ratings also consider its business model that leads to more concentration in the retail segment and the challenges related to the asymmetric liquidity in the market. Interbank has developed information-intensive credit scoring models and modern monitoring tools. Credit origination policies are conservative and collection efforts effective. A sound risk management team helps maintain very good asset quality. Past-due loans (90-day PDLs) did not exceed 2% of gross loans for the past five years. Interbank's performance has been consistently strong driven by loan growth, high margins, adequate expense control and moderate credit costs. This bolstered operating ROAA above 3% for more than five years. The bank has built an efficient retail franchise and positioned itself as a top contender in most retail products. Moreover, the bank has not neglected its corporate business, which appears well-focused and competitive, bringing balance and diversification to Interbank's balance sheet and revenue stream. Besides consistently retaining about 55% of its net income, the bank maintains ample reserve coverage thus creating a strong capital/ reserves cushion against unexpected losses. Along with its strong profitability, this allows Interbank to confidently face an eventual downturn. Funding and liquidity remain adequate on aggregate but depreciation expectations have halted de-dollarization on the deposit side hence creating a currency mismatch between deposits and loans. The central bank has acted to encourage and help banks de-dollarize but longer term measures will be needed unless depositors change their behavior and return to local currency for their transactions. The Stable Outlook reflects Fitch's belief that the bank's strong performance and margins are resilient to eventual downturns and even though some credit metrics may see a slight deterioration, they are likely to remain compatible with its current rating. SUPPORT RATING AND SUPPORT RATING FLOOR Interbank has an 11.5% market share in deposits and a sizable presence in all business segments. Support from the government should be forthcoming in case of need. Peru's ability to provide such support is reflected in its Sovereign Rating ('BBB+/A-') and underpins Interbank's Support and Support Rating Floor ratings. SUBORDINATED DEBT AND OTHER HYBRID SECURITIES Interbank's subordinated bonds are plain vanilla and lack the features that would earn them equity credit following Fitch's criteria. In Fitch's opinion, their probability of non-performance is equivalent to that of Interbank's senior bonds but, they would entail a higher loss in case of default due to their subordinated nature. Hence, they are rated only one notch below the bank's VR. Interbank's junior subordinated bonds, rated four notches below the bank's VR, have non-cumulative deferral of the coupons and a deeper subordination. This notching reflects the incremental non-performance risk relative to that captured by the VR and the loss severity (two notches) given its deeper subordination. RATING SENSITIVITIES VR, IDRs AND SENIOR DEBT Given its current rating, there is little upside potential for Interbank's VR and IDRs. Interbank's ratings could be downgraded if a severe decline in asset quality (PDLs above 4%) or weak profitability erode its capital (FCC consistently below 9%) and reserve cushion. SUPPORT RATING AND SUPPORT RATING FLOOR Interbank's SR and SRF could be affected if Fitch changes its view of Peru's ability or willingness to support the bank. SUBORDINATED DEBT AND OTHER HYBRID SECURITIES The Subordinated and Junior Subordinated debt ratings would move in line with Interbank's VR. Fitch has affirmed Interbank's ratings as follows: --Long-term foreign currency IDR at 'BBB+', Stable Outlook; --Short-term foreign currency IDR at 'F2'; --Long-term local currency IDR at 'BBB+', Stable Outlook; --Short-term local currency IDR at 'F2'; --Viability rating at 'bbb+'; --Support rating at '2'; --Support floor at 'BBB'; --Senior unsecured debt at 'BBB+'; --Subordinated debt at 'BBB' from; --Junior subordinated debt at 'BB'. Contact: Primary Analyst Diego Alcazar Director +1-212-908-0396 Fitch Ratings, Inc. 33 Whitehall St. New York, NY 10004 Secondary Analyst Veronica Chau Director +52 81-8399-9100 Committee Chairperson Alejandro Garcia Senior Director +52-81-8399-9146 Media Relations: Elizabeth Fogerty, New York, Tel: +1 (212) 908 0526, Email: elizabeth.fogerty@fitchratings.com. Additional information is available at 'www.fitchratings.com'. Applicable Criteria and Related Research: --'Global Bank Rating Criteria' (March 20, 2015). 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