MiBanco Banco de La Microempresa S.A.

The negative outlook on MiBanco reflects that on its parent, BCP, as long as the former remains a core subsidiary of the group. The negative outlook on BCP reflects the outlook on Peru. We could lower the sovereign ratings if prolonged political impasse or further adverse developments reduce the predictability of policymaking or worsen institutional stability, auguring badly for economic policy outcomes. On the other hand, if higher risks materialize that damage the operating conditions for banks in Peru--indicated by a downward revision of the BICRA economic risk score--it could hurt the bank's capitalization and intrinsic credit fundamentals, but not the ratings. We could downgrade MiBanco if we take the same action on BCP, which in turn could happen if

...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, thus we equalize our ratings on it with BCP's '###' group credit profile. MiBanco will retain stable intrinsic creditworthiness in the next few years. Its '##+' stand-alone credit profile (SACP), which is our view of the bank's creditworthiness based on its sole merits excluding group support, reflects its leading market position in the Peruvian microfinance segment, healthy earnings prospects and solid capital levels to absorb temporary pressures on asset quality. Moreover, the bank has an adequate funding and liquidity base, in line with the average of the Peruvian banking system....

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