Standard&Poor's Ratings Services' ratings on Banco Agricola S.A. (Agricola) are constrained by an important amount of restructured loans and foreclosures, the coffee sector's residual problems, and the relatively small size and limited diversification of El Salvador's economy. The ratings are supported by 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 those of its peers. Credit policies are adequate, and in the past two years, Agricola introduced important changes to underwriting processes to improve asset quality. Total NPAs--including nonperforming loans, foreclosed assets, restructured assets, and Ficafe--decreased to 7.6% as of December
