Scotiabank Chile

We also incorporate ongoing support from the bank's parent into our view of its funding and liquidity. The negative outlook on Scotiabank Chile reflects that on Chile, which captures weakening political consensus on key parameters of its political and economic agenda, which over time will weigh on Chile's capacity to grow and potentially weaken its credit quality. On the other hand, a downward revision of the bank's stand-alone credit profile (SACP; for instance, because of increasing risks for banks operating in Chile) wouldn't result in a downgrade, given that Scotiabank Chile is a strategically important subsidiary and we could reflect an additional notch of extraordinary support from its parent, BNS. We could lower the rating on Scotiabank Chile if we

...The likelihood of extraordinary support from the group is a credit strength for Scotiabank Chile. The 'A' rating on the bank incorporates two notches for potential extraordinary group support from BNS because we believe Scotiabank Chile is a strategically important subsidiary for the parent. We expect Scotiabank Chile to maintain a satisfactory business position in the Chilean financial system. The bank's strengthened its position following mergers and acquisitions, which diversified Scotiabank Chile's operations in terms of lending sectors, segments, and clients, all of which confer revenue stability. These factors temper the competitive pressures....

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