S&P removes Financiera Independencia from CreditWatch list, affirms ratings

Thursday, March 17, 2011

S&P has removed Mexican microlender Financiera Independencia from CreditWatch with negative implications, following the completion of a review of the company's financial strength.

The ratings agency affirmed its ratings for the lender, noting that its outlook was stable. In a release on the ratings action, S&P noted that while Independencia's recent acquisitions would indeed affect its capital adequacy ratio, that impact would be temporary considering the company's strong ability to generate income.

The agency said it expected Independencia's capital adequacy ratio to return to normal levels in two years, following the closing of its acquisition of competitor Apoyo Económico Familiar this month.

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While the acquisition will improve the quality of Independencia's portfolio and eventually increase its profitability, S&P said it would be difficult for the lender to return to pre-crisis earnings levels.