Standard&Poor's Ratings Services' ratings on El Salvador-based Banco Agrícola S.A. are constrained by the bank's significant amount in restructured loans and foreclosures, the Salvadorian coffee sector's residual problems, and the relatively small size and limited diversification of the country's economy. The ratings are supported by Agrícola's leading market position in El Salvador, diversified loan portfolio, good profitability, and broad base of retail deposits. The bank has better efficiency ratios, lower funding costs, and less concentration in its client base than its peers. Agrícola's total nonperforming assets (NPAs)--including nonperforming loans, foreclosed assets, restructured assets, and Ficafe--are close to 7% at June 2008 from 15% in December 2002. This improvement reflects the bank's adequate credit policies, by which it has
