November 1, 2013
Credit is expanding rapidly across the system and bad loans are relatively sparse. Yet running a bank in Argentina is no easy business.
A deteriorating economy and the government’s long-running dispute with bondholders since its 2001 default have taken a toll on the sovereign’s ratings. Moody’s, Standard & Poor’s and Fitch have all downgraded Argentina in the past 12 months, which has a knock-on effect to bank ratings.
For Fitch, the banks’ ratings were already constrained by what it views as a high probability of government intervention. One example of that came in 2012, when the central bank called for lenders to extend 5% of their loan books to three-year corporate loans at a fixed 15
Banco Macro has grown its balance sheet and kept its financial metrics sound over the past year