Fitch Ratings has affirmed its ratings for Banco Interacciones and its securities firm affiliate Interacciones Casa de Bolsa. The ratings reflect Banco Interacciones' solid franchise, favorable financial performance, and adequate capital levels. However, the ratings are limited by loan concentrations and challenges in the bank's liquidity and funding profiles. Fitch also affirmed the ratings of Interacciones Casa de Bolsa based on its relationship to its parent company. The outlook for both entities remains stable.

1. Fitch Affirms Banco Interacciones and Interacciones Casa de
Bolsa's Ratings; Outlook Stable | Reuters
(The following statement was released by the rating agency)
MONTERREY, August 14 (Fitch) Fitch Ratings has affirmed its
ratings for Banco
Interacciones, S.A. (Interacciones) and its affiliate securities
firm,
Interacciones Casa de Bolsa, S.A. de C.V. (ICB) as follows:
Interacciones:
--Long-term foreign and local currency IDRs at 'BB';
--Short-term foreign and local currency IDRs at 'B';
--Viability rating at 'bb';
--Support rating at '5';
--Support rating floor at 'NF';
--National-scale long-term rating at 'A(mex)';
--National-scale short-term rating at 'F1(mex)';
--National-scale long-term rating for local senior unsecured
debt issues at
'A(mex)';
--National-scale long-term rating for local subordinated debt
issues at
'BBB(mex)'.
ICB:
--National-scale long-term rating at 'A(mex)';

2. --National-scale short-term rating at 'F1(mex)'.
The Rating Outlook on the long-term international and/or
national scale issuer
ratings of both entities remains Stable.
KEY RATING DRIVERS
Interacciones' viability rating and IDRs reflect the company's
solid franchise
in its main business, becoming a specialized entity and an
important player on
public-sector financing; favorable and stable financial
performance, as the bank
has been able to sustain good profitability metrics; low
impairment ratios and
ample cushion of loan reserves; and adequate loss absorption
capacity through a
Fitch Core Capital ratio standing at comfortable levels.
The bank's ratings are limited by loan portfolio concentrations
(by borrower and
sector) that expose it to event risk and by the deteriorated
creditworthiness of
some of its main borrowers. Nevertheless, most of its total loan
portfolio is
secured by direct or indirect government guarantees. The ratings
consider
Interacciones' challenging liquidity and funding profile, as the
restructurings

3. of some of its largest exposures increased significantly its
asset and liability
mismatches in recent years; and its concentrated customer
deposits base.
Interacciones' national scale long- and short-term ratings are
driven by the
bank's financial strength. The support rating and support rating
floor reflect
that, although possible, external support cannot
be relied upon;
given the low
systemic importance of the bank.
Fitch affirmed the bank's hybrid local securities
at 'BBB(mex)',
which is three
notches below Interacciones' long-term national scale rating.
This was driven by
Fitch's approach to rating subordinated securities, which
incorporates its
non-performance risk (two notches) and recognition of loss
severity (one notch).
ICB is a subsidiary of Grupo Financiero Interacciones (GFI),
whose credit
quality is linked to Interacciones (the group's primary
subsidiary). The ratings
of ICB reflect the parent's legal obligation to support its

4. subsidiaries as well
as its core role to the overall group's business.
RATING SENSITIVITIES
Interacciones' viability rating and IDRs could benefit over the
medium term from
a significant decrease in its borrower concentrations, as well
as in its assets
and liabilities maturities mismatches. Fitch considers these
changes unlikely at
present, as reduced concentration levels or material
improvements in the bank's
borrower credit quality is not expected in the near term.
However, sustained
improvements on the bank's funding and liquidity profile could
result in a
positive rating action over the medium term. A downgrade is also
possible if
further negative credit events emerge among the bank's major
borrowers with
consequent material effects to its overall financial profile and
asset quality.
Also, pressures on the bank's capitalization levels (FCC and/or
tangible equity
ratios below 10% and 5%, respectively) could also pressure the
ratings.
A potential upgrade of Interacciones' support rating and support

5. rating floor is
limited, since external support cannot be relied upon, although
it's possible.
The subordinated debt national scale ratings will likely mirror
any change in
Interacciones' VR, as these are expected to maintain the same
relativity to the
bank's credit rating.
A potential upgrade or downgrade of ICB's ratings will be driven
by any
potential changes on Interacciones' ratings, or changes in the
legal framework
that could alter the propensity of GFI to provide support,
scenario that seems
unlikely at present.
Contact:
Monica Ibarra (Primary Analyst)
Director
+52 818 8399 9150
Fitch Mexico SA de CV
Prol. Alfonso Reyes 2612, Edificio Conexity Piso 8
Col. Del paseo Residencial
64920 Monterrey, N.L., Mexico
Alejandro Garcia (Secondary Analyst)
Analyst
+52 818 8399 9146

6. Committee Chairperson
Franklin Santarelli
Managing Director
+1 212 908 0739
Media Relations: Elizabeth Fogerty, New York, Tel: +1 (212) 908
0526, Email:
elizabeth.fogerty@fitchratings.com.
Additional information is available on www.fitchratings.com
Applicable Criteria and Related Research:
--'Global Financial Institutions Rating Criteria' (Aug. 15,
2012);
--'Assessing and Rating Bank Subordinated and Hybrid Securities'
(Dec. 5, 2012);
--'National Ratings Criteria' (Jan. 19, 2011).
Applicable Criteria and Related Research:
Global Financial Institutions Rating Criteria
here
Assessing and Rating Bank Subordinated and Hybrid Securities
here
National Ratings Criteria
here
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Solicitation Status
here
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