Update: Banco Industrial S.A.

Our stable outlook on Banco Industrial for the next 12 months mirrors that on Guatemala (foreign currency: BB-/Stable/B), which constrains our rating on the bank. The outlook also incorporates our opinion that Banco Industrial will remain one of the most resilient banks in the country in coping with the COVID-19 pandemic, thanks to its solid market presence and large deposit base. We believe Banco Industrial will continue posting a stable operating performance and healthier asset quality metrics than the Guatemalan system average. We could lower the ratings on Banco Industrial in the next 12 months if we take a similar action on Guatemala, which could occur if the pandemic-induced economic shock and the government's fiscal deficit lead to persistently weak

...We believe Banco Industrial will continue to cope with the pandemic-induced economic downturn. In our view, Banco Industrial's market leading position will enable the bank to withstand the anemic credit fundamentals across many sectors in Guatemala. In this sense, we believe the financial sector will continue reeling from the pandemic's impact in the next few months due to the slow vaccination in the country. Nonetheless, we believe the bank's portfolio loan mix--mainly consisting of loans to large corporations--and prudent risk management will keep the credit losses manageable. On the other hand, we expect the bank to struggle to expand its retail portfolio during 2021 and 2022 due to the sharp economic downturn and the depressed consumer segment....

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