Wide diversification by geography, economic sector, and client allows us to rate the bank above the sovereign rating on Ecuador (B-/Stable/B). The funding structure relies on a stable and highly diversified deposit base with manageable short-term financial obligations. Economic woes stemming from the COVID-19 pandemic, coupled with the historically political vulnerability in the region, could dent the bank's profitability and asset quality metrics. Considerable exposure to the consumer lending segment could further pressure asset quality metrics. Our assessment of the bank's capital and earnings incorporates the region's high economic risks. The stable outlook on PFC for the next 12 months reflects our expectation that the bank would maintain stable capitalization metrics, reflected in our projected RAC ratio of about 4.19%
