S&P Global Ratings on Dec. 14 affirmed its BB/B global scale and brAA-/brA-1+ national scale ratings on Banco Safra SA.
The ratings reflect the bank's strong risk controls on credit origination and guarantees management, which enabled it to register nonperforming loan growth below the industry average during Brazil's recession, S&P said. The ratings also consider the bank's niche small- and medium-sized enterprise and large corporate customer base, as well as its dependence on net interest margins.
The bank also displays still-concentrated, although improving, funding conditions and leveraged, albeit still good-quality, capitalization after large dividend payments in 2017.
The outlook remains negative, reflecting the negative outlook on Brazil and the negative economic and industry risk trends in the country's banking industry country risk assessment.
S&P Global Ratings and S&P Global Market Intelligence are owned by S&P Global Inc.