Fitch Ratings on June 8 removed Banco Original SA's ratings from Rating Watch Negative and assigned a negative outlook on the bank's B+ long-term foreign and local currency issuer default ratings and BBB(bra) long-term national rating.
At the same time, Fitch affirmed the bank's ratings.
The removal of Banco Original's ratings from Watch Negative reflects a significant reduction in the bank's refinancing risks and its success in overcoming potentially negative implications on its franchise and business models of investigations into related parties, Fitch said. However, potential contagion risks from ongoing investigations of the bank's sister company JBS SA and their shareholders remain, the rating agency added.
The negative outlook, meanwhile, reflects the bank's continued operating losses amid a challenging operating environment. The bank's capital adequacy ratios and liquidity remain adequate, Fitch said.
Joesley and Wesley Batista, part of the Batista family that owns Banco Original controller J&F Investimentos SA, have been subject to investigations after they claimed that they paid out bribes to several Brazilian politicians.
