New York, December 20, 2022 -- Moody's Investors Service ("Moody's") has completed a periodic review of the ratings -and other ratings that are associated with the same analytical units for the rated entity(entities) listed below.
The review was conducted through a portfolio review discussion held on 13 December 2022 in which Moody's reassessed the appropriateness of the ratings in the context of the relevant principal methodology(ies), recent developments, and a comparison of the financial and operating profile to similarly rated peers. A possible outcome from periodic reviews is a referral of a rating to a rating committee.
This publication does not announce a credit rating action and is not an indication of whether or not a credit rating action is likely in the near future. Credit ratings and outlook/review status cannot be changed in a portfolio review and hence are not impacted by this announcement.
Key Rating Considerations
The principal methodology used for the rated entities listed below was Banks Methodology published in July 2021. Please see the Rating Methodologies page on https://ratings.moodys.com for a copy of this methodology.
Key rating considerations on a forward-looking basis may include but are not limited to the following summarized below.
Banks Methodology
Asset Risk: a bank's asset risk is fundamental to creditworthiness because banks have high leverage, which implies that a small deterioration in asset value has a large effect on solvency. Credit quality problems are typically at the root of most bank failures, even though these problems can take a variety of forms, for example a deteriorating value of the loan collateral, resulting in higher losses. Asset risk includes a bank's other assets as well may also be vulnerable to other non-lending risk including market risk and operational risk.
Capital: asset risk and the need for capital go hand in hand. The greater the risk of unexpected loss, the more capital a bank needs to hold in order to retain the confidence of creditors, which enables the bank to fund itself and to shield bondholders from loss.
Profitability: profitability is an important indicator of an institution's ability to generate capital, and is hence another measure of its ability to absorb losses and recover from shocks. A bank with weak or negative profitability has less ability to absorb asset risks than one with strong internal capital generation capacity, other things being equal.
Funding Structure: a bank's funding structure has a strong bearing on its probability of failure or requiring assistance, because some sources of funds are less reliable than others. A bank that makes significant use of an unreliable funding source — perhaps short-term in nature, or from particularly risk-sensitive counterparties — is more likely to suffer periodic difficulties in refinancing its debt, putting it at greater risk of needing support.
Liquid resources: to provide a full picture of liquidity, an assessment of the funding structure of a bank has to be viewed in the context of the composition of its assets. Liquid resources are enhanced when a bank has high-quality liquid assets that can both be readily sold or pledged for cash in private markets in response to its funding counterparts' changing behavior, or that can in extremis be repoed with central banks under standard terms.
Qualitative considerations: There are occasionally other bank-specific considerations that we believe can influence core fundamentals. These additional factors are typically qualitative in nature, although in some cases our assessments may be informed by certain quantitative indicators. These factors include Business Diversification, Opacity and Complexity and Corporate Behavior.
The bank ratings are ultimately derived from the application of our Support and Structural Analysis, which comprises the following:
Affiliate Support, where an entity may be supported by other entities within a group, or occasionally affiliated third parties, thus reducing its probability of default.
Loss Given Failure (LGF), where we undertake a liability-side analysis to assess the impact of a failure — absent government support — in terms of the potential resultant loss on the bank's rated debt instruments. We also incorporate instrument-specific coupon features.
Government Support, where an entity may be supported by public bodies, such as local, regional, national, or supranational institutions, again reducing the risk for some or all instruments. We assess this using our JDA framework.
• BAC International Bank, Inc
• Banco Davivienda S.A.
• Banco de Costa Rica
• Banco de Desarrollo de El Salvador
• Banco de Galicia y Buenos Aires S.A.U.
• Banco de los Trabajadores
• Banco de Reservas de la Republica Dominicana
• Banco del Bajio, S.A.
• Banco General, S.A.
• Banco Hipotecario S.A.
• Banco Industrial S.A.
• Banco Internacional del Peru (Panama Branch)
• Banco Latinoamericano de Comercio Exterior
• Banco Macro S.A.
• Banco Mercantil del Norte, S.A.
• Banco Nacional de Comercio Exterior, S.N.C.
• Banco Nacional de Costa Rica
• Banco Nacional de Mexico, S.A.
• Banco Nacional de Panama
• Banco Santander Argentina S.A.
• Banco Santander México, S.A.
• Bancolombia S.A.
• BBVA Colombia S.A.
• BBVA Mexico, S.A.
• Gilex Holding S.A.
• Global Bank Corporation and Subsidiaries
• Grupo Aval Acciones y Valores S.A.
• Ind'l & Comm'l Bank of China Ltd., Panama Br
• Nacional Financiera, S.N.C.
The principal methodology used for the rated entity listed below was Government-Related Issuers Methodology published in February 2020. Please see the Rating Methodologies page on https://ratings.moodys.com for a copy of this methodology.
Key rating considerations on a forward-looking basis may include but are not limited to the following summarized below.
Government-Related Issuers Methodology
Assigning a Baseline Credit Assessment (BCA): The majority of Government-Related Issuers (GRIs) begin with an assessment of the GRI's standalone strength (i.e. BCA) – its ability to service and repay outstanding debt without recourse to extraordinary support from the supporting government - using the published sector-specific methodology that is most suitable for the predominant activities of the GRI. Our assessment of standalone strength includes any day-to-day support received from the government that can be clearly distinguished from extraordinary support. Support mechanisms, such as an obligation of the government to ensure the GRI's solvency and liquidity, are reflected in the BCA when they are legally or contractually documented.
Government uplift: The GRI's ratings include any uplift due to systemic support and typically focus on three structural factors and three factors explaining the level of the government's willingness to provide support. Structural factors address the legal and quasi-legal aspects of the government's relationship with the GRI and include: (1) guarantees, (2) ownership level and (3) barriers to support. The factors underlying willingness consider the softer connections between the two entities and include (4) the likelihood of government intervention, (5) political linkages and (6) economic importance. Support is determined using a joint default analysis framework which considers an estimate of the likelihood of extraordinary support, an assessment of the credit quality of the supporting government, and default correlation between the two entities.
GRIs without a BCA: In limited instances, it is not possible or meaningful to assign a BCA. The GRI is so inextricably linked to the government that a meaningful standalone BCA cannot be derived. In such cases, a top-down analytical approach is used that chiefly considers the ability and willingness of the government to provide timely support, instead of the usual bottom-up approach of starting with the BCA and then considering uplift towards the government's rating.
• Nacional Financiera, S.N.C.
This announcement applies only to Rated Entities with EU rated, UK rated, EU endorsed and UK endorsed ratings. Rated Entities, with Non EU rated, non UK rated, non EU endorsed and non UK endorsed ratings may be referenced herein to the extent necessary, if they are part of the same analytical unit.
Please see the Issuer page on https://ratings.moodys.com for each of the ratings covered, most updated credit rating action, rating history, and Credit Rating action Press Release including the rating rationale and factors that could lead to a rating upgrade or downgrade.
This publication does not announce a credit rating action.
For any credit ratings referenced in this publication, please see the issuer/deal page on https://ratings.moodys.com
for the most updated credit rating action information and rating history.
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