S&P ups Banco de Credito Social

S&P said it raised its ratings on Banco de Credito Social Cooperativo SA (BCC) and its senior unsecured debt to BB+ from BB and its subordinated debt to B+ from B.

The agency said it considers BCC a core subsidiary of Grupo Cooperativo Cajama (GCC).

“The upgrade reflects our view that GCC's earnings capacity will improve significantly over this year and next, reducing the gap with that of higher-rated peers. Higher interest rates will represent a meaningful push to earnings, which – coupled with cost savings from previous restructuring – will make GCC's operating income before provisions almost double in 2023 when compared with 2022. Some of these earnings will be used in 2023 to complete the provisioning of legacy assets and to finance early retirements, thus they will not be fully visible in the group's bottom line. But, in 2024, we expect return on equity to climb to about 8.3%-8.8%,” S&P said in a press release.

The outlook is stable.

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