...Ratings Based on Intrinsic Strength: Banco Industrial's (BI) Long-Term Issuer Default Rating (LT IDR) is driven by its stand-alone Viability Rating (VR). Despite the bank's systemic importance, Fitch Ratings assigns only a moderate probability of support from the Guatemalan government, should it be required (reflected in a Support Rating Floor of BB, one notch below the sovereign rating). The estimation of support is based on the state's limited financial flexibility and the banking system's significant foreign currency obligations. Pressured Capital: The Fitch core capital declined to 9.8% of risk weighted assets at December 2015. BI's holding company is in the process of injecting capital, expected in the first half of 2016, and has provided updated filings to the U.S. Securities and Exchange Commission for an initial public offering since May 2015. The bank also has buffers against unexpected losses in the form of loan loss reserves (in excess of 200% of impaired loans) as well as GTQ1.4bn...
