Update: Banco De Galicia Y Buenos Aires S.A.U.

The stable outlook for the next 12 months on Banco Galicia mirrors that on Argentina, reflecting the balance between risks stemming from economic challenges--high inflation, low growth, large structural fiscal imbalances, high financing needs, and ongoing pressure in the foreign exchange markets--and a favorable near-term amortization profile. We could lower the ratings on Banco Galicia in the next 12 months if we take a similar action on the sovereign. A deterioration in the entity's credit fundamentals wouldn't lead to an automatic downgrade because its 'b+' stand-alone credit profile (SACP) is higher than the long-term issuer credit rating. We could raise the ratings on the bank in the next 12 months if we were to raise the rating on the sovereign,

...Key strengths Key risks Good competitive position in Argentina's financial system, which provides low-cost and diversified deposit base funding. Fragile economic conditions in Argentina--low economic growth prospects and high inflation, exacerbated by the impact of the pandemic--are eroding banking system profitability. High liquidity in both local and foreign currency. Transactional system with very low access to credit, lack of long-term funding base, and compressed margins....

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