Standard&Poor's Ratings Services' ratings on Guatemala-based Banco G&T Continental S.A. reflect a high concentration in certain clients, low coverage of nonperforming assets (NPAs), and high exposure to foreign-currency risk on the balance sheet. Deteriorating asset quality and persistent double leverage limit the bank's adjusted capitalization and profitability, also constraining the ratings. However, G&T Continental's good market position, long track record in the Guatemalan banking industry, large and diversified deposit base, and adequate access to long-term funding sources support its financial profile and the ratings. The bank's commercial orientation makes diversification a challenge. At year-end 2009, corporate loans represented 82.5% of its total loans, and these were concentrated in a few clients. Pressures in the Guatemalan economy from a
