Moody's lowers Banco Rural

Moody's Investors Service said it downgraded Banco Rural SA's the bank financial strength rating to E from E+ and its unsupported baseline credit assessment to Caa1 from B3.

Moody's also downgraded Rural's long-term global local and foreign currency deposit ratings to Caa1 from B3 and long-term Brazilian national scale deposit rating to Caa1.br from B1.br.

The short-term local and foreign currency deposit ratings of Not Prime and the short-term Brazilian national scale deposit rating of BR-4 remained unchanged.

Moody's also maintained the review for possible downgrade on Rural's supported deposit ratings, while the bank financial strength rating carries a stable outlook.

Moody's said its decision to downgrade Rural's ratings is a consequence of the bank's prolonged delay in publishing audited financials for 2012 and resulting opacity about the bank's financial performance and credit risk.

Preliminary reports submitted to the Brazilian banking regulator indicate that Rural reported net losses as of year-end 2012, its second consecutive year of weak results that reflect high credit, operating and funding costs combined with poor revenues from core activities.

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