Moody's lowers Banco Hipotecario baseline

Moody's Investors Service said it affirmed all of the ratings on Banco Hipotecario SA, including its B2 and A3.ar global and national scale local-currency deposits ratings, along with the bank's B3 and Baa1.ar global and national scale foreign-currency deposit ratings.

Moody's also said it downgraded the bank's baseline credit assessment to B3 from B2 and its counterparty risk assessment to B2(cr) from B1(cr).

The outlook also was changed to negative from stable, except for the outlook on the foreign-currency deposit ratings, which remains stable.

The downgrades of follow the deterioration of the bank's asset quality stemming from its large exposure to risky consumer loans, compounded by the recent impairment of a sizable corporate exposure, Moody's said.

The downgrades also consider high credit costs, which have negatively affected the bank's profitability and capitalization, the agency said.

Subdued loan growth, stable profitability through year-end 2018 and low dividend payouts have allowed the bank to maintain stable capital metrics, even as those of many of its peers deteriorated, Moody's said.

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