Fitch lowers Banrisul

Fitch Ratings said it downgraded Banco do Estado do Rio Grande do Sul SA’s (Banrisul) long-term national rating to A+(bra) from AA-(bra) and its short-term national rating to F1(bra) from F1+(bra).

The agency also said it downgraded the rating on Banrisul’s first issuance of senior unsecured financial bills to A+(bra) from AA-(bra).

Fitch also affirmed the rating on the tier II capital subordinated notes due in February 2022 at BB-, along with its long-term foreign- and local-currency issuer default ratings at BB-short-term foreign- and local-currency issuer default rating at B and viability rating at BB-.

The outlook is negative.

The bank’s credit profile remains highly sensitive to further operating environment deteriorations in the respective regions where their operations are concentrated, the agency said.

The bank operates as a regional commercial bank with strong franchises and wide array of banking products that help them compete against larger banks with nationwide operations, Fitch said.

The bank, however, is vulnerable to governmental changes, which can lead to more frequent changes of its executive board, the agency said.

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