S&P GlobalRatings on Oct. 4 affirmed its B+/B global scale and brBBB-/brA-3 national scaleratings on Banco Pan SAand removed them from CreditWatch with negative implications.
The move followsa similar action on parentBanco BTG Pactual SA inSeptember.
The ratingsare based on Banco Pan's stand-alone credit profile of "b+," which reflectsa moderate business position. S&P noted the bank's small market share and revenuevolatility as its portfolio shifts to lower-risk segments such as payroll lending,while maintaining a focus on vehicle financing.
The bank alsohas weak capital and earnings, with a risk-adjusted capital ratio forecast at about4.5% for the next two years, a moderate risk position, and adequate funding andliquidity driven by funding support from CaixaEconômica Federal.
S&P addedthat due to Brazil's challenging economic scenario, the bank has been unable togrow its portfolio to compensate for its current cost structure, leading to profitabilitypressures. However, the bank has continued improving its risk profile, with itsportfolio expanding operations into payroll loans and real estate.
S&P Global Ratings and S&P Global MarketIntelligence are owned by S&P Global Inc.