The ratings on Banco Agricola S.A. are constrained by an important amount of restructured loans and foreclosures, residual problems of the coffee sector, and 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, its diversified loan portfolio, good profitability, and broad base of retail deposits. The bank has better efficiency ratios, lower funding costs, and lower concentrations in its client base than do its peers. Credit policies are adequate, and in the past year, Agricola introduced important changes to underwriting processes to improve asset quality. Total nonperforming assets (NPAs), that include nonperforming loans (NPLs), foreclosed assets, restructured assets, and Ficafe, went down to 10% as
