S&P might lower Banrisul

S&P said it placed its BB long-term global-scale rating and brA+ national-scale rating on Banco do Estado do Rio Grande do Sul SA (Banrisul)on CreditWatch negative, with the potential for a multiple notch downgrade.

The agency classifies Banrisul as a government-related entity (GRE) with a limited link to the government, which stems from uncertainty about the government's capacity to support GREs.

S&P believes the bank has limited importance to the government, given that it's a profit-seeking enterprise whose public services role could be eventually undertaken by another entity.

Up to that point, the agency said it believes that the bank's controlling shareholder, the government of Rio Grande do Sul, has a limited ability to use the bank as a financing vehicle, given that the bank must comply with Central Bank requirements, the Fiscal Responsibility Law, and any additional requirements set by the National Treasury, limiting transactions with the state.

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