S&P: Consubanco, S. A. Institucion de Banca Multiple 'BB' Ratings Affirmed, Outlook Remains Stable
The ratings reflect our view of Consubanco's weak business position mainly due to its revenue concentration in payroll discount lending services. We also view its capital and earnings as very strong based on our forecasted RAC ratio of 19.8% on average for the next 18 months. The ratings also reflect our assessment of Consubanco's risk position as moderate as a result of its portfolio concentration, higher-than-peers' nonperforming assets, as well as the operating risks inherent in operating with public-sector entities. The ratings also incorporate our assessment of Consubanco's funding as below average due to the lack of a sound deposit, retail-oriented base compared with Mexican banking system, and its liquidity as moderate.