Research Update: Banca Mifel S.A. 'BB/B' Global And 'mxA/mxA-1' National Scale Ratings Affirmed; Outlook Remains Stable

Despite Mexico-based Banca Mifel's recent unsuccessful attempt to issue its IPO, we continue viewing its capital base supported by its adequate capital generation and lack of dividend distribution, resulting in a projected risk-adjusted capital (RAC) ratio of 8.3%. Banca Mifel's asset quality metrics compare well with the average of the Mexican banking system; however, its concentrated loan portfolio in terms of sectors and client base could make the bank more sensitive in periods of stress. We're affirming our 'BB/B' global scale and 'mxA/mxA-1' national scale issuer credit ratings on the bank, as well as our 'B' issue-level rating on the bank's fixed-rate cumulative subordinated preferred notes. Banca Mifel's stable outlook reflects our expectation that internal capital generation will continue while

...+ Despite Mexico-based Banca Mifel's recent unsuccessful attempt to issue its IPO, we continue viewing its capital base supported by its adequate capital generation and lack of dividend distribution, resulting in a projected risk-adjusted capital (RAC) ratio of 8.3%. + Banca Mifel's asset quality metrics compare well with the average of the Mexican banking system; however, its concentrated loan portfolio in terms of sectors and client base could make the bank more sensitive in periods of stress. + We're affirming our '##/B' global scale and 'mxA/mxA-1' national scale issuer credit ratings on the bank, as well as our 'B' issue-level rating on the bank's fixed-rate cumulative subordinated preferred notes. + Banca Mifel's stable outlook reflects our expectation that internal capital generation will continue while it maintains comparable non-performing asset (NPA) ratios to the rest of the Mexican banking system. It also indicates our belief that the bank will keep a similar funding structure...

Research Update