Moody’s shifts Banrisul view to negative

Moody’s Investors Service said it changed the outlook for Banco do Estado do Rio Grande do Sul SA (Banrisul) to negative from stable.

The state of unrated Rio Grande do Sul, which owns and controls the bank, also falls under significant fiscal distress. The outlook reflects the heightened risk on the bank’s capitalization and profitability following its Feb. 5 announcement. The state wants to renegotiate Banrisul`s contract to provide payroll services to the state civil servants.

Moody’s also lowered Banrisul’s national ratings but affirmed its B1 foreign-currency subordinated debt rating.

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