Moody's cuts four Brazil banks' view to negative

Moody's Investors Service said it changed to negative from stable the outlook on all ratings of Banco BMG SA, Banco Cruzeiro do Sul SA, Banco Bonsucesso SA and Banco Schahin SA.

The change in outlook reflects a view that these banks' Ba rating levels may be negatively affected over the next months by the Brazilian Central Bank's recently announced macro-prudential measures, Moody's said.

The ratings will primarily be affected by the increase of capital requirement for long-term payroll loans and vehicle financing operations, the agency said, and by the gradual decrease in the limit for banks to issue deposits guaranteed by the deposit insurance fund.

These measures are likely to require these banks to adjust their loan origination flow during a period of tightened liquidity and take on higher funding costs, which may ultimately adversely affect their business volumes and earnings generation, Moody's said.

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