Fitch Ratings on Oct. 17 upgraded the long-term local currency issuer default ratings of BBVA Banco Francés SA to B+ from B.
Fitch also maintained the bank's viability rating at "b." The outlook is stable.
The upgrade is based on Fitch's view that the bank's shareholder support has improved, due to an improved economic and regulatory policy framework in Argentina and decreased risk of government intervention in private banks' operations.
Fitch also expects the commitment of the parent, Banco Bilbao Vizcaya Argentaria SA, will likely remain in place given the parent's track record of ordinary support, its investments in the bank's competitive position and the subsidiary's strategic importance to the group.
Meanwhile, the bank's viability rating reflects its stable funding and strong liquidity. Fitch also considers the bank's risk appetite and other financial metrics, which are in line with its current viability rating, even when taking into account inflation.
Despite improved financing access, higher monetary policy credibility and lower regulatory risks, Argentina's still weak operating environment remains the principal constraint on the bank's viability rating. In Fitch's view, progress in correcting macroeconomic imbalances, easing of inflation, lower financing constraints and a return to growth will take time to materialize.
Positively, the bank's viability rating also considers the bank's strong franchise and longevity in the local market, Fitch noted.