{"id":379,"date":"2021-05-11T15:54:00","date_gmt":"2021-05-11T15:54:00","guid":{"rendered":"https:\/\/www.panama-real-estate.com\/blog\/?p=379"},"modified":"2021-05-14T16:03:49","modified_gmt":"2021-05-14T16:03:49","slug":"moodys-reaffirms-banco-generals-baa2-rating","status":"publish","type":"post","link":"https:\/\/www.panama-real-estate.com\/blog\/moodys-reaffirms-banco-generals-baa2-rating\/","title":{"rendered":"Moody\u2019s reaffirms Banco General&#8217;s Baa2 rating"},"content":{"rendered":"\n<figure class=\"wp-block-image size-large is-resized\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/www.panama-real-estate.com\/blog\/wp-content\/uploads\/2021\/05\/bg.jpg\" alt=\"\" class=\"wp-image-380\" width=\"314\" height=\"236\" srcset=\"https:\/\/www.panama-real-estate.com\/blog\/wp-content\/uploads\/2021\/05\/bg.jpg 413w, https:\/\/www.panama-real-estate.com\/blog\/wp-content\/uploads\/2021\/05\/bg-300x225.jpg 300w\" sizes=\"auto, (max-width: 314px) 100vw, 314px\" \/><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\">According to Moody\u2019s, Banco General&#8217;s BCA baa2 assertion reflects the disciplined asset quality and recurring profit generation supported by its broad and diversified banking franchise in Panama, which, in turn, historically secures a historically strong capital position.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The baa2 BCA also recognizes the bank&#8217;s broad and constant access to basic deposits in Panama, where the bank has a 28% market share, guaranteeing the bank adequate levels of liquidity throughout economic cycles.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The risk rating agency explained that the deterioration of the bank&#8217;s 90-day problem loan index to 1.5% of gross loans at the end of 2020, from 1.2% in 2018, reflected the strong 17.9% economic contraction of the Panamanian economy caused for the coronavirus pandemic (COVID-19) in 2020.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">However, Banco General has a granular loan portfolio, which will help mitigate continued pressures if the economy remains below pre-pandemic levels in 2021.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">It adds that the strong capitalization of Banco General as measured by Moody\u2019s, adjusted tangible ordinary capital (TCE) over risk-weighted assets (RWA) of 17.9% as of December 2020, is a key strength for the BCA.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In 2020, the increase in the equity ratio was supported by a modest 1% loan growth in 2019, followed by a 4% contraction in the loan portfolio in 2020.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">However, &#8220;as Banco General resumes lending in 2021, we expect the capital ratio to remain high relative to its peers, supported by the bank&#8217;s recurring internal capital structure of the generation and loan book,&#8221; says the rating agency.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The bank&#8217;s historically strong profitability was affected by business volumes, lower interest rate levels and strong increases in provision expense costs in 2020.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In 2020, net income to tangible assets decreased to 1.7% from a three-year average of 2.5% between 2017 and 2019.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Additionally, Banco General maintains a low cost of financing, ongoing efforts around cost controls, and a gradual and sustainable increase in business activities, which will likely contribute to earnings in 2021.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Moody\u2019s reaffirms Banco General&#8217;s Baa2 rating, with a \u201cStable\u201d outlook<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[],"class_list":["post-379","post","type-post","status-publish","format-standard","hentry","category-living-investing"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.0 - 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