Fitch Ratings on March 28 assigned to Banco de la Ciudad de Buenos Aires, or Banco Ciudad, long-term foreign and local currency issuer default ratings of B, with a positive outlook, plus a viability rating of "b."
The bank's issuer default ratings are equalized with those of its parent, the City of Buenos Aires, which Fitch believes has adequate capacity and propensity to provide extraordinary support if needed. Such support is likewise reflected in the city's legal guarantees of the bank's liabilities, its full ownership of the bank, and the integral role played by Banco Ciudad in the city's government operations.
Meanwhile, Banco Ciudad's viability rating is influenced by its capitalization ratios. Fitch notes that despite a low cash dividend payout at an average of 8% of net income over the last five years, Banco Ciudad's asset growth has consistently outpaced internal capital generation, which steadily pressures its equity.
The bank's Fitch core capital ratio as compared to risk-weighted assets stood at 12.6% at the end of 2017, down from 16.9% at the end of 2014. The ratio of tangible assets to tangible common equity stands at 8.4%.