April 18, 2017 / 7:45 PM / 4 months ago

Fitch Affirms Provincia Casa Financiera at 'B'; Outlook Stable

(The following statement was released by the rating agency) SAO PAULO, April 18 (Fitch) Fitch Ratings has affirmed Provincia Casa Financiera's (Provincia) Long-Term Foreign Currency and Long-Term Local Currency Issuer Default Ratings (IDRs) at 'B'. A full list of rating actions follows at the end of this press release. KEY RATING DRIVERS - IDRs Provincia is a branch of Banco de la Provincia de Buenos Aires (BAPRO) and part of the same legal entity. Therefore, Provincia's IDRs reflect Fitch's opinion of BAPRO's financial and business profile, which are highly influenced by its leading franchise and systemic importance as the second largest bank in terms of deposits and the fourth in loans in Argentina. Fitch also considers the bank's good asset quality, ample liquidity, moderate profitability and low capital base. In addition, BAPRO and Provincia are wholly-owned by the government of the Province of Buenos Aires. BAPRO's liabilities (including those of its branches abroad) are fully guaranteed by the government of the Province of Buenos Aires. In Uruguay, Provincia is small due to its narrow business focus. Its legal status is a casa financiera, which differs from a banking license because it is not allowed to raise resident's deposits and has much lower regulatory costs. However, in terms of regulatory capital limits, Provincia has to comply with the rules applied to banks. Provincia is fully integrated with its head office's strategies, corporate governance practices and risk management procedures. It operates through one office and reports to the International Division of BAPRO. Provincia has a low, albeit improving profitability, low credit risk, a highly liquid balance sheet and adequate capitalization metrics. The branch's current business plan aims to improve its profitability mainly through a more active pricing policy, improving its cost efficiency, a more active management of its trading portfolio and loan growth once the Uruguayan economy resumes growth. KEY RATING DRIVERS - SUPPORT RATING The Support Rating of '5' reflects that, although possible, external support for this bank, as with most Argentine banks, cannot be relied upon given the ample economic imbalances. In turn, the sovereign ability and willingness to support banks is highly uncertain. RATING SENSITIVITIES IDRs Provincia's IDRs are sensitive to changes in BAPRO's financial and business profile. RATING SENSITIVITIES - SUPPORT RATING Changes in Provincia's Support Rating are unlikely in the foreseeable future. Fitch has affirmed the following ratings: Provincia Casa Financiera: --Long-Term Foreign Currency IDR at 'B'; Outlook Stable; --Long-Term Local Currency IDR at 'B'; Outlook Stable; --Support Rating '5'. Contact: Primary Analyst Pedro Gomes Director +55 11 4504-2604 Fitch Ratings Brasil Ltda. Alameda Santos, 700 - 7th floor Cerqueira Cesar, Sao Paulo, SP, Brazil Secondary Analyst Santiago Gallo Director +56 2 2499 3320 Committee Chairperson Theresa Paiz Fredel Senior Director +1-212-908-0534 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 Global Bank Rating Criteria (pub. 25 Nov 2016) here Additional Disclosures Dodd-Frank Rating Information Disclosure Form here Solicitation Status here#solicitation Endorsement Policy here ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: here. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEB SITE AT WWW.FITCHRATINGS.COM. 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