Chile and Uruguay banks outlook for 2013 stable and negative for Argentina, says Fitch ratings
The outlook for Southern Cone Banks is mixed in 2013, with a stable outlook for Chile and Uruguay, while Argentina faces a negative outlook and the potential for downgrades, according to a new Fitch Ratings report.
'Fitch does not anticipate any rating changes for Chilean banks given low credit risk and adequate capitalization and liquidity ratios. No change is expected for banks in Uruguay unless the sovereign, Rating Outlook currently Positive, is upgraded,' said Santiago Gallo, Director, in Fitch's Latin America group.
'The ratings of many Argentine financial institutions were recently downgraded in line with the sovereign downgrade and any further downgrade of the latter will likely impact the ratings of many banks. In addition, the solid asset quality and profitability ratios of Argentine banks may deteriorate due to sluggish economic growth, higher inflation and greater macroeconomic volatility - creating the possibility of further downgrades in 2013,' said Maria Fernanda Lopez, Senior Director, in Fitch's Latin America group.
Chilean bank profitability will remain under pressure in 2013. While loan growth will continue to be strong, bank operating revenues will be undermined by stable interest and inflation rates and new regulations tending to limit some interest rates and fees and lower operating revenues. Additionally, the cost of funding is expected to increase due to greater competition among banks for structural deposits, particularly retail.
Fitch expects Uruguayan banks' profitability to remain moderate in the medium term. Increased profitability depends on private sector credit growth, and expanded recurring operating revenues via higher commissions and service fees to reduce vulnerability to exchange rate volatility and inflation adjustments.
The Argentine government has recently imposed a number of controls and new regulations that limit activities in the financial sector, which reduce banks' ability to adjust to changes in the operating environment.
Profitability may come under pressure due to the slowdown in credit growth, lower yields on government securities, higher inflation-related expenses, greater loan loss provisions and a possible hike in the cost of funding as a result of increased macroeconomic volatility.
Suggested Stories
-
May 17th 2013
Argentina’s ‘autarkic project’ worsens bilateral relations and multiplies problems
-
May 17th 2013
Argentine whitewash bill turning into ugly electoral debate
-
May 14th 2013
Argentine inflation controversy: court vindicates private stats agencies
-
May 18th 2013
“Blue” dollar in Argentina picks up in last day of trading and reaches 8.95 Pesos
10 comments Feed
Note: Comments do not reflect MercoPress’ opinions. They are the personal view of our users. We wish to keep this as open and unregulated as possible. However, rude or foul language, discriminative comments (based on ethnicity, religion, gender, nationality, sexual orientation or the sort), spamming or any other offensive or inappropriate behaviour will not be tolerated. Please report any inadequate posts to the editor. Comments must be in English. Thank you.
SELF-DETERMINATION!
@2 Knowing her personality, you very well might get quite the comedy show after all. Haven't you noticed that news of her stupidity is published almost daily?
The Brits are funny people, they pity those who are “gullible” to the info they are fed, but they fail to realize the British banking cabal is fully corrupt in bed with their governmment, and apparently neither a massive economic crisis they still are enduring, nor a large-scale criminal interest rate manipulation (nor a huge rating agency corruption uncovering, nor banking leaders calling them “plebs, muppets”), gets them to admit the truth of their situation.
Most delusional people on Earth. They deserve the triple dip, and the quadruple dip. I don't know the word for “five dip” recession, but I'm sure they will introduce it to us.
They're bankrupt they just do know it yet.
and
8/1 was breached
Interesting tidbit the unions are fighting for around P$8K/Mo and the guy who heads the tax collections makes P$100,000/mo!!!
simply outrageous.
Rgs are either very stupid or very lazy to let this go on year after year.
I hear there were some educated economists let go from INDEC that might want work.
I'm sure Asia would love a better agency.
Because they could not find three wise men and a virgin.
I know it's an old joke.
Commenting for this story is now closed.
If you have a Facebook account, become a fan and comment on our Facebook Page!