Banco do Brasil, Itau Unibanco Ratings Downgraded by Moody’s
Banco do Brasil SA, Banco Itau Unibanco (ITUB) SA and six other Brazilian financial institutions were downgraded by Moody’s Investors Service today as part of a global review of banks rated higher than their home countries.
The standalone bank financial strength ratings or baseline credit assessments of eight institutions was lowered by one to three levels, concluding reviews that Moody’s announced on Feb. 24 and March 15, the ratings company said in a statement.
Last week, markets responded to Moody’s downgrade of 15 of the world’s largest banks by bidding up the value of their stocks and bonds. The prospect of downgrades had weighed on banks since the company said on Feb. 15 that it was reviewing 17 financial firms with capital-markets operations because of fragile confidence and tighter regulations that pinched revenue.
Banco do Brasil, the country’s largest bank, was lowered three grades to Baa2, or the sovereign rating, putting it two levels above junk. Itau Unibanco, the second-largest, and Banco Bradesco SA (BBDC4), ranked No. 3, were each cut by three levels to Baa1, above the nation’s rating.
Banco Safra SA, Banco Santander Brasil and HSBC Bank Brasil were the other banks lowered to Baa2. Banco Itau BBA SA was cut to Baa1 and Banco Votorantim SA was cut to one level below the sovereign rating.
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