Research Update: Banco G&T 'BB-/B' Ratings Affirmed On Business Stability And Higher Capitalization; Outlook Remains Positive

Banco G&T Continental S.A.'s (Banco G&T's) sound internal capital generation and the recent sale of its subsidiaries in Costa Rica and El Salvador have improved the banking parent's consolidated capitalization. We project the group's risk-adjusted capital (RAC) ratio will average 7.7% in the next two years, which prompted us to revise our assessment of the bank's capital and earnings to a stronger category. Despite Banco G&T's shrinking geographic diversification after the sale of its subsidiaries outside of Guatemala, its business and financial profiles remain resilient, given improving profitability, rising capitalization, and healthier asset quality. The bank also strengthened its efficiency while gradually reducing its largest risk exposures, enabling Banco G&T to withstand the pandemic and post-pandemic challenges with sound results.

...- Banco G&T Continental S.A.'s (Banco G&T's) sound internal capital generation and the recent sale of its subsidiaries in Costa Rica and El Salvador have improved the banking parent's consolidated capitalization. We project the group's risk-adjusted capital (RAC) ratio will average 7.7% in the next two years, which prompted us to revise our assessment of the bank's capital and earnings to a stronger category. - Despite Banco G&T's shrinking geographic diversification after the sale of its subsidiaries outside of Guatemala, its business and financial profiles remain resilient, given improving profitability, rising capitalization, and healthier asset quality. The bank also strengthened its efficiency while gradually reducing its largest risk exposures, enabling Banco G&T to withstand the pandemic and post-pandemic challenges with sound results. - We're affirming our global scale '##-/B' issuer credit rating (ICR) on Guatemalan based bank. - The outlook on Banco G&T remains positive, mirroring...

Research Update