The downgrade of Peru’s sovereign credit rating, which occurred on Friday, has just been felt in the local financial sectorBecause yesterday Standard & Poor’s (S&P) reduced the note for seven Peruvian financial entities.
The S&P agency cut included BCP, MiBanco, Scotiabank, BBVA, Interbank, Development Finance Corporation (Cofide) and the Mivivienda Fund. However, the agency specified that the outlook for all entities is stable.
As for the holding companies, the ratings for Credicorp and Intercorp Financial Services were maintained at BBB and BBB-respectively.
The new rating on financial entities followed as a result of the downgrade of the sovereign rating that was issued on Friday and acts as a cap or reference, affecting local entities every time it is modified.
“Peru’s rating downgrade reflects the erosion of the institutional assessment of the sovereign rating after a prolonged period of political instability, due to ongoing tensions between the Executive and Legislative branches,” the S&P agency said.
It should be noted that on Friday Standard & Poor’s reported that ‘downgrade’ was also explained by withdrawals from pension funds and the greater dependence on external financing in 2020 and 2021, since it considered that both factors “affected the composition of Peru’s debt ”, leading to a “currently more vulnerable debt profile”.
