Standard&Poor's Ratings Services' ratings on El Salvador-based Banco Agrícola S.A. (Agrícola) are constrained by the country's relatively small size, limited diversification, low growth prospects, and strongly competitive banking system. Agrícola's leading market position in the country, adequate financial performance, and experienced management team, however, do support the ratings. In our opinion, Agrícola's asset quality could be pressured as a result of the more-challenging economic environment in El Salvador, within its relatively small and undiversified economy, having low levels of investment. Adequate risk management practices and a more-stringent reserve policy coming from Bancolombia have supported the bank's asset quality. As of July 2010, reserve coverage of nonperforming loans was 125% and the level of nonperforming assets (nonperforming loans, restructured
