The ratings on Banco Agrfcola S.A. (Banco Agricola) are constrained by the bank's vulnerable asset quality due to its relatively flexible policy toward loan restructuring and a nonconservative reserve policy on nonperforming assets (NPAs), which is a weakness of the Salvadorian banking system as a whole. The ratings are also constrained by the relatively small size and limited diversification of El Salvador's economy. The ratings are supported by Banco Agricola's leading market position in El Salvador, particularly in attracting retail deposits, which contributes to good liquidity. Other positive factors considered in the ratings are the adequate management of the bank, which has been able to maintain profitability levels despite the challenging economic environment during the past two years. Banco Agricola
