BAC International Bank Inc.

The stable outlook on our rating on BAC International Bank (BIB) primarily reflects our expectation that it will maintain its leading position in Central America and its wide geographic diversification over the next 12-24 months. That will continue to support its business stability. Additionally, the outlook incorporates our expectation that the bank will maintain its healthy asset quality because of its conservative lending policies, stable capitalization, well-diversified funding, and healthy liquidity. We could lower the ratings on BIB if its capital metrics deteriorated. This would show up as a projected RAC ratio below 5% or as weaker-than-expected asset quality that would lead us to revise down the stand-alone credit profile (SACP). Additionally, we could lower the ratings if economic risk

...Good 2023 financial results for Panama-based universal bank BAC International Bank Inc.--and its prospects for the next 12-24 months--provide stability to its credit fundamentals. Therefore, we believe our ratings on the bank will continue to reflect its wide geographic and business diversification and its resilient capitalization, supported by its strong and stable profitability. We also expect the ratings to continue to reflect its conservative stance on risk-taking (as evidenced by its healthy asset quality) and its adequate funding and liquidity. The bank's conservative lending policies and sound risk diversification will help it maintain its healthy asset quality, in our view, despite the challenging economic conditions that we think Central America will see in the next 12-24 months. Nonperforming assets (NPAs)--that is, nonperforming loans more than 90 days past due plus foreclosed assets--will be about 1.5% of total loans in 2024-2025 and will remain fully covered by reserves, while...

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