S&P ups Banco BMG

Standard & Poor's said it raised its long-term counterparty credit rating on Banco BMG SA to BB- from B+.

The rating was removed from CreditWatch positive where it was placed June 11, the agency said.

The outlook is stable.

S&P said that the rating action reflects its perception that the overall more favorable monetary and investment environment in Brazil, which includes the deepening of local capital markets and increased lending activity, supports Banco BMG's retail lending operations and favors greater and more sustainable access to diversified funding sources.

The ratings on Banco BMG incorporate the risks of significant product concentration, high competition in the market with expected margin pressure on payroll-discount loans and dependence on wholesale funding while these risks are partially offset by a well-defined and successful strategy as a niche bank with good execution based on technology and distribution capabilities, the agency added.

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