Following its peer review of three Mexican Midsized banks, Fitch Ratings has taken the following rating actions:

Banco Regional de Monterrey, S. A.:

--National scale Long-Term rating upgraded to 'AA+(mex)'from 'AA(mex)'; Outlook Stable;

--National scale Short-Term rating affirmed at 'F1+(mex)'.

In addition, Fitch has affirmed the ratings for the following banks:

Banco del Bajio, S. A.:

--Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs) at 'BBB-'; Outlook Stable;

--Short-Term foreign and local currency IDRs at 'F3';

--Viability rating at 'bbb-';

--Support Rating at '4';

--Support Rating Floor at 'BB-';

--National scale long-term rating at 'AA-(mex)'; Outlook Stable;

--National scale short-term rating at 'F1+(mex)'.

Banco Interacciones, S. A.:

--Long-Term Foreign and Local Currency IDRs at 'BB+'; Outlook Stable;

--Short-Term Foreign and Local Currency IDRs at 'B';

--Viability rating at 'bb+';

--National scale long-term rating at 'A+(mex)'; Outlook Stable;

--Support rating at '5';

--Support Rating Floor at 'NF';

--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)'.

The banks included in this peer review are considered by Fitch among the most consolidated medium-sized banks in Mexico. They all rank immediately below the seven large universal banks in terms of loans and deposits, and together represented 7% and 6.7%, respectively, of the Mexican banking system at March 2016. These banks are specialized in specific sectors, products or geographical areas where they have demonstrated good expertise and performance.

The three banks maintain good and consistent financial performance, where asset quality is well-controlled and non-performing loans (NPLs) are low, as a result of their corporate clientele, predominantly SME and government lending. Their profitability remains sound and consistent due to their stable and sound margins, moderate credit costs, and well-controlled operating expenses. Their lower funding costs than other local mid-sized banks is also factored in as a positive.

In all cases, loss absorption capacity is sound due to solid and stable capitalization ratios, all with comfortable buffers above regulatory minimums. Ample loan loss reserves for all three further support their loss absorption capacity.

In Fitch's view, the main challenge for these banks is to continue enhancing their liquidity profiles even with the relatively ample maturity mismatches between assets and liabilities, coupled with relatively concentrated funding structures. However, Fitch considers as positive the banks' efforts to improve access to long-term funding via the larger credit facilities of local development banks and long-term debt issuances, together with gradually growing their liquid assets base. To further reduce the high concentration risk (by borrower and geographic zone) also remains among the main challenges.

Fitch has published individual press releases for each of these banks that are available on www. fitchratings. com and www. fitchcentroamerica. com. These press releases include each issuer's key rating drivers and sensitivities, as well as the list of all rating actions taken.