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Fitch affirms Nafin, Banobras
Fitch Ratings said it affirmed its ratings on Nacional Financiera (Nafin), Banco Nacional de Obras y Servicios Publicos (Banobras) and with stable outlooks.
The ratings affirmed include the banks' AAA(mex) national-scale ratings for local bonds, BBB foreign-currency long-term issuer default ratings, F3 foreign-currency short-term ratings, BBB+ local-currency long-term issuer default ratings, F2 local-currency short-term ratings, 2 support ratings, AAA(mex) national-scale long-term ratings and F1+(mex) national-scale short-term ratings.
The agency said the ratings reflect the strength of explicit support the banks would receive from the Mexican government, if required, as well as their importance to the country as development banks.
Since early 2001, Nafin has, under new management, taken a proactive approach to cleaning up its balance sheet, continuing cost-cutting efforts and improving risk management systems and its performance has gradually improved, the agency said, adding that this improvement remains challenged by modest loan growth and narrow interest margins.
Fitch said Banobras has consistently reported positive earnings for many years, but noted that the bank has been challenged by increasing competition from commercial banks in the financing of local governments and infrastructure projects and non-recurring costs charged by the government.
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