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Argentine Crisis Increases Risks for Foreign Banks With Local Operations Apr 02
Standard & Poors, April 2002
Abstract
The negative impact of the Argentine crisis on local foreign-owned banks continues to grow. The peso devaluation, pesification of commercial and consumer loans, and growing doubts about loan quality will all have an impact on the ultimate losses suffered by the parent banks. Provisions by year-end 2001 are likely to prove insufficient as the year progresses, unless the banks are able to finalize exit strategies. Indeed, the Citigroup provision in the first quarter of 2002 is an indication of the economic losses yet to come. Different accounting practices cloud and complicate the analysis of provision and loss levels. The Argentine banking system continues to weaken. In November, 2001, the total collapse of confidence led to a deposit run, which ended...
Companies mentioned in this report are: Credit Agricole S.A.,HSBC Bank PLC,The Bank of Nova Scotia,FleetBoston Financial Corp.,Citigroup Inc.,Banco Santander S.A.,Argentina (Republic of) (Unsolicited Ratings),Intesa Sanpaolo SpA,Banca Nazionale Del Lavoro S.A.,Banco Bilbao Vizcaya Argentaria S.A.
Standard and Poors RatingsXpress Credit Research provides in-depth coverage of international corporates, financial institutions, insurance companies, utilities, sovereigns and structured finance programs. RatingsXpress Credit Research lets users determine the credit rating of holdings and identify key factors underlying an issuer's creditworthiness, distinguishes the different risk exposures for new and existing deals, and provides an understanding of how their analysts interpret key regulatory, political and environmental events and their economic impact.
Research Type: Commentary
Criteria articles describe the thought process and methodology Standard & Poor's analysts use in determining ratings. These commentary pieces discuss both the quantitative (economic and financial) and qualitative (business analysis and caliber of management) aspects of the analysis, as well as legal issues.
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