S&P ups Banco do Brasil

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

The foreign and local currency ratings of Banco do Brasil are now equalized at BB. The outlook on the ratings is stable.

S&P said the long-term counterparty credit rating on Banco do Brasil reflects the direct exposure to sovereign credit risk in the form of marketable securities, our assessment of high economic risks within the Brazilian banking industry and the still-weak intrinsic quality of the bank's capital base.

On the positive side, the rating incorporates the firm commitment and support demonstrated by the Federative Republic of Brazil, the competitiveness by Banco do Brasil in private-sector-related operations while keeping its public-sector mission and the bank's strong franchise and extensive branch network, S&P noted.

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