S&P Global Ratings on April 4 lifted its ratings on four Argentine banks following its upgrade of the sovereign.

The rating agency upgraded its foreign and local currency issuer credit ratings on Banco de la Provincia de Buenos Aires, Banco Hipotecario SA, Banco Patagonia SA and Banco de Galicia y Buenos Aires SA to B from B- with a stable outlook, matching an upgrade earlier in the day on Argentina's long-term sovereign credit ratings.

S&P said it also raised the short-term issuer credit rating on Banco Patagonia to B from C, as well as the senior unsecured debt ratings on both Banco Galicia and Banco Hipotecario to B from B-. Banco Galicia's subordinated debt rating, meanwhile, was affirmed at CCC.

The rating agency directly linked the banks' ratings upgrade to that of Argentina, which S&P had attributed to progress in the government policy efforts to resolve economic imbalances and restore policy credibility.

Still, S&P noted that both the economic and industry risks for banks operating in the country are high, pointing to ongoing political challenges as well as continued exposure to "significant market distortions, including high inflation and a lack of diversified and long-term funding."

The banking industry risk assessment, or BICRA, on Argentina remains at group 9, the S&P said, which anchors banks operating in Argentina at 'b+' with Cambodia, Vietnam and Kenya being the country's BICRA peers.

S&P Global Ratings and S&P Global Market Intelligence are owned by S&P Global Inc.