MiBanco, Banco de La Microempresa S.A.

The negative outlook on MiBanco mirrors the one on BCP, which at the same time reflects the negative trend on the economic risk, according to our Banking Industry Country Risk Assessment (BICRA) of Peru. We could revise the economic risk score to a weaker category in the next 24 months, pressuring domestic banks' risk-adjusted capital (RAC) ratios, if credit losses in the banking system escalate much more than expected or if the economic recovery in 2021-2022 is weaker than our current base-case scenario. As a result, we would revise our capital assessment and SACP to weaker categories and lower the ratings on BCP, and consequently on MiBanco, because ratings on it move in parallel with those on its parent. We

...We expect the bank to continue benefiting from support of its parent, BCP. We consider MiBanco, Banco de La Microempresa S.A. (MiBanco) as a core subsidiary of BCP because the microlender plays an important role in the group's business diversification strategy. The subsidiary has solid earnings prospects, and we believe BCP is committed to provide strong and long-term support to the subsidiary. Given its core status, we equalize our ratings on MiBanco with BCP's '###+' group credit profile. MiBanco will maintain a sound intrinsic creditworthiness in the next few years. Its '##+' stand-alone credit profile (SACP), which is our view of the bank's creditworthiness on its sole merits excluding group support, reflects its leading market position in the Peruvian microfinance segment, healthy earnings prospects after the pandemic fades, and comfortable capital levels to absorb temporarily rising credit losses. Moreover, the bank has an adequate funding and liquidity base, in line with the average...

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