Promerica Financial Corp.

The stable outlook on PFC for the next 12 months incorporates our expectation of the group's rising bottom-line results and resilient business and financial performance, supported by its broad geographic diversification and sound market presence in the region. Additionally, we expect the bank to keep a risk-adjusted capital (RAC) ratio of about 4.3% for the next two years while maintaining manageable asset quality metrics and a diversified deposit base. Finally, we forecast PFC's double leverage will be about 115% for the next 12 months. We could downgrade PFC's ratings if its double leverage exceeds 120% during the next 12 months, which would reflect more vulnerability to the dividend upstream from its subsidiaries. Additionally, we could lower the group's rating if

...We expect Promerica Financial Corp. (PFC) to maintain stable profitability despite our expectation of subdued economic growth across the diverse Latin American economies where it operates. We expect PFC's market share and diversified and stable revenue sources to support business stability for 2023-2024. We believe steady lending growth at about 10% and resilient net interest margins (NIM) will enable the group's operating revenue to grow 12% on average for the next two years, exceeding its five-year average. We believe PFC's asset quality will remain manageable, although high interest rates could dent the disposable income of companies and households. In our view, prudent lending practices will allow the group to maintain stable asset quality. However, we believe global risks haven't eased and persistently high rates could still weaken demand and erode some companies' profits. Additionally, we anticipate the group will continue facing difficulties to sharply growing its retail business...

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