S&P ups Banco Safra

Standard & Poor's said it raised its foreign currency counterparty credit ratings on Banco Safra SA to BB from BB- following the upgrade of the foreign-currency rating assigned the Federative Republic of Brazil to BB from BB- and its local-currency rating to BB+.

The outlook is stable.

S&P noted the ratings on Banco Safra consider the bank's differentiated position and strong track record in the middle-market segment in Brazil, the historically good asset quality indicators, which are explained by the benefits derived from its position as a pioneer bank operating with receivables and its strong brand name and the reputation of the controlling families.

The ratings also incorporate the lower-than-expected profitability for its target markets, the strong competitive environment, particularly in the middle-market segment and the consequent challenges of growing this business and the bank's exposure to the economic risk of the Brazilian financial system, the agency added.

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