S&P Global Ratings on April 6 affirmed its BB global and brA+/brA-1 national scale ratings on Banco Votorantim SA.
The rating agency also affirmed unit Votorantim Finanças SA's brA+/brA-1 ratings, but then withdrew them at the company's request, and assigned brA+/brA-1 ratings to BV Leasing Arrendamento Mercantil SA.
The outlook on all of the ratings is negative.
The rating affirmation on Banco Votorantim reflects the financial support the lender receives from Votorantim SA and Banco do Brasil SA, its controlling shareholders, in time of need, S&P said. It also incorporates the lender's stable performance despite the tightening lending conditions in Brazil.
S&P noted that the bank was able to maintain its profitability by "adjusting risk controls in its used-vehicles lending business for the past three years and following the risky decision to renegotiate some large corporate loans."
The negative outlook reflects that on Votorantim, and the negative trend on Brazil's BICRA economic and industry risks.
"Profitability of Brazil-based Banco Votorantim was steady in 2016, despite the very difficult conditions in the vehicles and corporate lending segments in the country," the rating agency noted.
S&P Global Ratings and S&P Global Market Intelligence are owned by S&P Global Inc.