S&P: Nine Brazilian banks on positive watch

Standard & Poor's said it placed its ratings on nine midsize, niche Brazilian banks on CreditWatch with positive implications, including Banco BMG SA at B+/B, Banco Daycoval SA at B+/B, Banco Fibra SA at B+/B, Banco Industrial e Comercial SA at B+, Banco Indusval SA at B+/B, Banco Panamericano SA at B/B, Banco Pine SA at B+/B, Banco Schahin SA at B/B and Parana Banco SA at B/B.

The agency said that the CreditWatch placement reflects its view that the midsize banking industry in Brazil will greatly benefit from the country's more stable macroeconomic environment, adding that there is potential for a one-notch upgrade of the global-scale ratings on various rated niche banks.

S&P added that it sees liquidity and funding as the main risk factors constraining the credit quality of small and midsize banks, as access to funding proved to be very volatile in less benign times.

With the greater stability of the local economy and a consistent deepening of the local capital markets, the agency said it expects funding available to niche banks to be more resilient than in the past.

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