Moody’s downgrades eight banks in Brazil

Moody’s has downgraded Brazil’s stock exchange operator, BM&FBovespa, as well as eight banks, by one-to-three notches, reports Financial Times.

Read: Brazil moves up the ranks

Votorantim, a Brazilian bank struggling due to its heavy exposure to the auto sector, was downgraded below Brazil’s sovereign rating because of poor financial performance and “prospects of ongoing challenges to its financial strength,” Moody’s said.

While Brazil’s banking system has survived many internal crises, smaller lenders lack adequate funding as the economy slows.

Read: Eye on emerging markets

The country’s larger banks also face lower returns on equities because of tighter interest rate spreads and slower credit expansion.

Read: Moody’s continues frenzy, 15 banks downgraded

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.