Argentina Watch: Moody's upgrades, UBS bank report

Thursday, December 7, 2017

Moody's has taken rating actions on multiple domestically owned Argentine banks as well as other financial institutions, bond funds and securitizations.

The move comes after the agency revised up the ratings on 19 insurers and reciprocal guarantors and after it upgraded Argentina's government bond rating to 'B2' from 'B3'.

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Moody's upgraded the debt ratings of Banco de Galicia, Banco Hipotecario, Banco Macro, Banco Supervielle and leading credit card issuer Tarjeta Naranja. The agency also upgraded the baseline credit assessments of 18 banks and the long-term local currency deposit ratings of 14 banks by one notch each, among other actions.

It also took action on 159 bond funds, upgrading some of them, and on several securitizations.

On the bank upgrades, Moody's said: "These rating actions on Argentine banks and other financial institutions follow the upgrade of Argentina's sovereign bond rating, which was driven by the record of macroeconomic reforms passed under Macri administration that are beginning to address long existing economic distortions in Argentina and the likelihood that the reforms will continue, sustaining the recent return to economic growth. The sovereign's stable outlook balances recent improvements to the economy and the country's policymaking with still high fiscal deficits that are mostly funded in foreign currency and growing external imbalances."

Obtain details of the rating moves.


Swiss investment bank UBS, in a report on Latin American banks, indicated it was upbeat on prospects for the region's lenders.

UBS cited factors such as low penetration, credit growth forecasts and profitability levels.

The bank said lenders in Argentina, as well as in Peru and Brazil "look attractive." By the end of the year, the loan portfolio of Argentina's lenders is expected to have grown by more than half.

The region's economy is gathering strength, driven on by a resurgent Argentina and Brazil.

UBS said in the report: "As strategist, we like LatAm equities given our belief of economic acceleration in LatAm for 2018. In our view, banks are a levered way to play the economic recovery."