S&P revises Banco Fibra view to stable

S&P said it revised its outlook on Banco Fibra SA to stable from negative and also affirmed its B-/B global and brBBB-/brA-3 national scale issuer credit ratings on the bank.

“The outlook revision takes into account our view that the risk of Fibra's balance sheet worsening further because of Brazil's recent economic crisis has decreased. In addition, we expect Fibra's credit growth to remain low in the next two years, which should support stable capitalization levels,” said S&P in a press release.

The bank's credit losses have fallen in the past few years, thanks to stronger underwriting standards, improving economic conditions, and a gradual reduction of its low-quality legacy loan portfolio. Moreover, S&P expects the Brazilian economy to continue recovering in the next two years, supporting the bank's efforts to stabilize its asset quality metrics and reducing the need for additional provisions. “Therefore, we believe that a deterioration in asset quality that could impair the bank's bottom-line results is less likely,” S&P said.

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