Low adjusted capitalization, debt at the holding company level, low profitability, structural asset concentrations, and the strong competitive environment in Central America limit the ratings on Banco G&T Continental S.A. Mitigating factors include the bank's strong and improving market position in Guatemala, stock-ownership support, and good, experienced management. Although capitalization remains a ratings weakness, Standard&Poor's Ratings Services expects noticeable improvement in the rest of 2008 as a consequence of concrete steps to strengthen adjusted capitalization. As of March 2008, the bank's adjusted total equity (ATE)-to-assets ratio was 5.6%, which we consider low. This is similar to the 5.2% reported before capital injections and the merger with Banco de Exportación S.A. (Banex). The issuance of preferred shares should drive
