...Sound Domestic Franchise: Banco G&T Continental's (G&TC) IDRs and viability rating (VR) are driven by its sound niche position and franchise, good asset quality and efficiency, ample deposit base and adequate liquidity position. G&TC's ratings are tempered by its moderate capitalization and profitability, and its relatively high exposure to its largest debtors, related- party borrowers and the local sovereign. Moderate Risk Appetite: G&TC's underwriting standards and controls are aligned with industry practices and are reflected in good asset quality indicators. However, G&TC's asset growth has exceeded its internal capital generation over the past six years, presenting a challenge for the bank. Modest Profitability: G&TC has maintained modest profitability, below the average of direct local peers and the system as a whole. It has remained limited mainly by its relatively lower net interest margin (NIM) of 3.3% in 2013, which is explained by its corporate banking niche, a highly competitive...
