BAC International Bank Inc.

The stable outlook primarily reflects our expectation that BIB will maintain its strong presence and leading position in Central America for the next 12-24 months, as well as wide geographic diversification, all of which will continue to support its business stability. Additionally, the outlook incorporates our expectation that the bank will maintain manageable asset quality metrics, stable capitalization, a solid funding base, and a healthy liquidity position. We could lower the ratings on BIB if its capital metrics deteriorated, such as a projected RAC ratio below 5% or weaker-than-expected asset quality, leading us to revise its stand-alone credit profile (SACP) downward. Additionally, we could lower the ratings on the bank if the economic risk increases in the banking systems where

...BAC International Bank Inc. (BIB) achieved good financial results in 2022, and we expect this trend to persist this year, providing stability to the bank's capitalization. The bank's healthy credit growth, improving margins, and cost containment efforts allowed it to achieve good profitability in 2022, with return on assets (ROA) and return on equity (ROE) at 1.6% and 16%, respectively. The latter, along with high retention of profits, was reflected in stable capitalization, with its risk-adjusted capital (RAC) ratio at 7.0% at year-end 2022. In 2023-2024, we expect this ratio to be about 6.6% in average. The challenging economic outlook for 2023 will limit credit demand and pressure asset quality. We expect total loan growth to moderate toward 8%-9% this year and be 10% in 2024--after growing about 12% in 2022--while BIB maintains similar geographic and business diversification in its balance sheet. Weakening economic conditions will affect asset quality metrics, but these will remain...

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