Risk rating agency Moody’s reported on Thursday (4) that it had withdrawn all ratings from Banco Brasília (BRB) at the request of the institution itself. The review comes a week after the agency downgraded the bank’s credit rating to B3 amid a torrent of problems sparked by the Banco Master scandal.
According to the agency, the long- and short-term local and foreign currency deposit ratings, which were rated at B3 and not Prime, and the local and foreign currency counterparty risk ratings, which were rated at B2 and not Prime, were also removed.
In addition, the agency removed the Base Credit Assessment (BCA) and adjusted BCA, which was also at B3.
Moody’s said in a statement that the ratings and long-term estimates are under review for a possible downgrade.
In a note, the BRB explained that the contract with Moody’s provides for assessments to be carried out at both national and international levels. Since the bank does not raise funds on the international market, after the expiration of the contract in September, only the national rating, regulated by the local Moody’s, was maintained.
Last week, Moody’s and Fitch Ratings already downgraded BRB’s ratings. In Fitch’s case, the rating was down to CCC, the 17th grade among the entity’s 21 rating levels that indicates a high risk of default.
In the case of the Moody’s report published a week ago, the agency showed growing concerns about the bank’s risk management guidelines and controls in the wake of suspected fraud in the acquisitions of BancoMaster’s credit portfolios.
The case in question involves an accusation of illegal transfers of resources from BRB to Master through the purchase of false credit portfolios, which would be covered up by a public takeover of the private bank. The Central Bank prevented the completion of the deal in September and ordered the liquidation of El Sayed on the 18th.
The attempted sale of Master marked the beginning of a series of investigations against businessman Daniel Forcaro, the bank’s owner, who was arrested as part of Operation Zero Compliance, under the pretext that he was at risk of fleeing the country, and was released 11 days later, after the court accepted the habeas corpus request from the businessman’s defence.
The development of the story led to the sacking and dismissal of Paulo Henrique Costa, former president of the BRB.
Headquartered in Brasilia, BRB has assets of R$74.5 billion and a net worth of R$4 billion, according to its balance sheet as of June.