...Parent Support: Scotiabank Peru S.A.A.'s (SBP) IDRs are based on expected support from its parent. Fitch Ratings views SBP as a strategically important subsidiary for the Bank of Nova Scotia (BNS; AA¡/Stable). In Fitch's opinion, SBP would very likely receive support from its parent, if required. Strong Capitalization: SBP continues to report one of the strongest capitalization metrics among the largest Peruvian banks despite modest dilution of its Fitch core capital (FCC) to risk weighted assets (RWA) ratio to 13.75% in 2018 from 14.52% in 2017 as result of an acceleration in loan growth during the same period. Fitch believes this modest change in SBP's FCC-to-RWA ratio remains appropriate for the current VR level. The agency expects capitalization to remain above the peer average into 2019. Asset Quality Deterioration: SBP's consolidated asset quality ratios saw a moderate deterioration to 3.84% in 2018 from 3.48% in 2017, while most of the banking system experienced improvements. The...
