Fitch Ratings on Aug. 14 upgraded Banco do Estado de Sergipe SA, or Banese's long-term national rating to A-(bra) from BBB+(bra) and its short-term national rating to F1(bra) from F2(bra).

The ratings upgrade reflects Fitch's view on the strengthening of the bank's financial profile. The bank has consistently maintained high levels of profitability since 2016, continued to grow credit with stable default ratios despite a challenging operating environment as well as improved its capitalization ratios, Fitch said.

In addition, the ratings are driven by Banese's performance profile, which shows a stable business model with solid liquidity levels and a retail funding base. However, the ratings are constrained by the bank's modest size, small participation in the national banking sector and restricted access to new funding sources.

The outlook for the long-term rating is stable.