Leader in the Peruvian microfinance sector. Strong profitability. Strong risk management capabilities. Increasing competitive pressures in the Peruvian financial system. Asset quality indicators that compare negatively with the Peruvian banking system. Challenge to maintain capitalization levels given prospects of significant increase in loan portfolio. The rating on MiBanco, Banco de la Microempresa S.A. (Mi Banco) reflects the increasing competitive environment in the Peruvian financial system, especially in the microfinance segment. The rating also incorporates the bank's nonperforming loan (NPL) level that is higher than the Peruvian banking system average. The bank's strong profitability, strong risk management capabilities, and strong market position in the Peruvian microfinance sector counterbalance the weaknesses. As of Sept. 30, 2010, the adjusted capital-to-assets ratio—according to Standard
