Fitch Publishes Peer Review of Mexican Midsized Banks

MONTERREY, Mexico--()--Fitch Ratings has published a peer review of Mexican Midsized Banks that covers seven banks, comprising 4.9% of Mexican banking system total assets, and affirms ratings of those reviewed. At first quarter 2016 (1Q16), their business volume -all arising from Mexico - was around USD8,8 billion of the system's loan portfolio. See the full list of ratings at the end of this release.

The seven banks, Banco Invex (Invex), Bansi, Banco Multiva (BMultiva), Banca Mifel (Mifel), Banco Afirme (Afirme), Banco Bancrea (Bancrea) and Banco Ve por Mas (BBX+), have modest franchises and operate in a concentrated market and dominated by seven large universal banks. For this reason, these banks are specialized in specific sectors, products or geographical areas where they demonstrate good expertise which provides a competitive advantage to growing faster than the industry average.

These banks have maintained financial performance at healthy levels, where asset quality is under control and non-performing loans (NPLs) are low; profitability remains consistent, albeit still under pressure from increasing operating expenses due to their rapid growth. In all cases, loss absorption ability is sound due to relatively solid and stable capitalization ratios (all with satisfactory buffers over regulatory minimums) and moderate loan loss reserves.

For these banks, the main challenge is to enhance its liquidity profiles due to the ample maturity mismatches within their balance sheets, coupled with relatively concentrated funding structures. To reduce the high risk concentrations (by borrower and geographic zone) is also among the main challenges.

Fitch has affirmed the following ratings:

Banca Mifel S.A.

--Foreign currency Long-Term Issuer Default Rating (IDR) at 'BB'; Outlook Stable;

--Foreign currency Short-Term IDR at 'B';

--Local currency Long-Term IDR at 'BB'; Outlook Stable;

--Local currency Short-Term IDR at 'B';

--Viability rating at 'bb';

--National Scale Long-Term rating at 'A(mex)'; Outlook Stable;

--National Scale Short-Term rating at 'F1(mex)'.

--Long-Term cumulative subordinated preferred notes at 'B+';

--Support Rating at '5';

--Support Rating Floor at 'NF'.

BBX+

--Foreign currency Long-Term IDR at 'BB'; Outlook Stable;

--Foreign currency Short-Term IDR at 'B';

--Local currency Long-Term IDR at 'BB'; Outlook Stable;

--Local currency Short-Term IDR at 'B';

--Viability Rating at 'bb';

--Support Rating at '5';

--Support Rating Floor at 'NF'.

--National Long-Term Rating at 'A(mex)';Outlook Stable;

--National Short-Term Rating at 'F1(mex)'.

--Senior Unsecured Long-Term Debt at 'A(mex)'.

Bansi, S.A.

--National Scale Long-Term rating at 'A(mex)'; Outlook Stable;

--National Scale Short-Term rating at 'F1(mex)

Banco Multiva, S.A.

--National scale Long-Term rating at 'A(mex)'; Outlook Stable;

--National scale Short-Term rating at 'F1(mex)';

--Long-Term senior unsecured debt at 'A(mex)'.

Banco Invex, S.A.

--National scale Long-Term rating at 'A+(mex)'; Outlook Stable;

--National scale Short-Term rating at 'F1(mex)'.

Banca Afirme, S.A.

--National scale Long-Term rating at 'A-(mex)'; Outlook Stable;

--National scale Short-Term rating at 'F2(mex)'.

--Long-Term subordinated notes at 'BB+(mex)'

Bancrea, S.A.

--National scale Long-Term rating at 'BBB-(mex)'; Outlook Stable;

--National scale Short-Term rating at 'F3(mex)'

Fitch has published individual press releases for each of these banks that are available on www.fitchratings.com and www.fitchcentroamerica.com. These press releases include each issuer's key rating drivers and sensitivities, as well as the list of all rating actions taken.

Additional information is available on www.fitchratings.com

Applicable Criteria

Global Bank Rating Criteria (pub. 20 Mar 2015)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=863501

Metodologia de Calificaciones Nacionales (pub. 19 Jan 2011)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=682410

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Contacts

Fitch Ratings
Ricardo Aguilar (Primary Analyst Banco Ve por Mas and Banco Multiva)
Associate Director
+52 81 8399 9100
Fitch Mexico SA de CV
Prol. Alfonso Reyes 2612, Edificio Connexity Piso 8
Col. Del Paseo Residencial
64920 Monterrey, N.L., Mexico
or
Bertha Perez (Primary Analyst Banco Invex and Banca Mifel)
Associate Director
or
Alejandro Tapia (Primary Analyst Bansi)
Director
or
Veronica Chau (Primary Analyst Banco Afirme)
Senior Director
or
Priscila Garcia (Primary Analyst Bancrea)
Analyst
or
Media relations
Elizabeth Fogerty, New York, +1-212-908-0526
elizabeth.fogerty@fitchratings.com

Contacts

Fitch Ratings
Ricardo Aguilar (Primary Analyst Banco Ve por Mas and Banco Multiva)
Associate Director
+52 81 8399 9100
Fitch Mexico SA de CV
Prol. Alfonso Reyes 2612, Edificio Connexity Piso 8
Col. Del Paseo Residencial
64920 Monterrey, N.L., Mexico
or
Bertha Perez (Primary Analyst Banco Invex and Banca Mifel)
Associate Director
or
Alejandro Tapia (Primary Analyst Bansi)
Director
or
Veronica Chau (Primary Analyst Banco Afirme)
Senior Director
or
Priscila Garcia (Primary Analyst Bancrea)
Analyst
or
Media relations
Elizabeth Fogerty, New York, +1-212-908-0526
elizabeth.fogerty@fitchratings.com