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Moody’s: Banrisul on review
Moody's Investors Service said it placed on review for downgrade Banco do Estado do Rio Grande Do Sul SA’s (Banrisul) long-term global and national scale local-currency deposit ratings of Ba2 and Aa3.br and foreign-currency subordinate debt rating of Ba3.
Also on downgrade review includes the bank’s baseline credit assessment of Ba2 and long-term counterparty risk assessment of Ba1(cr).
The bank's other ratings were not affected, Moody’s said.
The agency said it plans to assess the impact on the bank after its recent acquisition of the right to provide payroll services for state employees.
As the right to provide these services is an intangible asset, Moody's said it deducts it from its tangible common equity measure of capitalization.
The acquisition also will lead to lower net income as the bank will no longer earn interest income on the cash used for payment, while the purchase price will be amortized over 10 years, the agency said.
The transaction also comes at a time when the bank's asset quality has continued to show signs of deterioration, Moody’s added.
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