Ratings downgraded for two, reviewed for further downgrade along with those of six other Portuguese banks
Madrid, April 06, 2009 -- Moody's Investors Service today took the following rating actions
on Portuguese banks:
(i) downgraded Banif SA's ratings to Baa1/P-2/D+ from
A2/P-1/C- and placed them on review for possible further
downgrade;
(ii) downgraded the issuer rating of the holding company Espirito Santo
Financial Group (ESFG) to A2 from A1 and placed it on review for possible
further downgrade
(iii) placed on review for possible downgrade the bank financial strength
ratings (BFSR) and long-term debt and deposit ratings of six Portuguese
banks: Caixa Geral de Depositos (rated Aa1/P-1/C),
Banco Comercial Portugues (Aa3/P-1/C+), Banco Espírito
Santo (Aa3/P-1/C+), Banco Santander Totta SA (Aa3/P-1/C+),
Banco BPI (A1/P-1/C) and Caixa Económica Montepio Geral
((A2/P-1/C-); the review for downgrade also includes
the short-term ratings); and
(iv) changed the outlook on Banco Itau Europa SA's C-/Baa1/P-2
ratings to negative.
The rating actions are prompted by the weakening of the Portuguese economic
environment, as reflected by Moody's negative credit outlook
on the Portuguese banking system, and pressure on the banks'
current capitalisation levels as a result of relatively poor performances
in 2008, anticipated lower revenue over the next few years and higher
credit-related write-down requirements.
REVIEWS FOR POSSIBLE DOWNGRADE
Moody's review of the BFSRs of these institutions reflects that
the intrinsic creditworthiness of all the rated banks has weakened and
is likely to continue to weaken during the ongoing crisis as a result
of one or a combination of several of the following factors: (i)
low capital levels; (ii) difficulties in generating new capital either
internally through earnings or externally; (iii) high credit risk
concentrations, in particular to corporates that may experience
distress; (iv) growth in lending above the average for the system;
(v) corporate governance issues ranging from overly complex organisational
structures, to a lack of independent board members and/or related-party
lending; (vi) exposure to market risk, which can further depress
capital levels and/or contribute to volatility in revenues; (vii)
slower growth in international operations and, in some cases,
greater volatility of contributions from Eastern European or Spanish operations;
and (viii) ongoing reliance on short-term market funding.
The banks that are likely to be more adversely affected by the outcome
of the review of the BFSRs are those with lower capitalisation levels
and higher expected losses on their risk assets. This reflects
the fact that Moody's will place a greater emphasis on particular
rating considerations such as capital and future earnings prospects as
a result of the ongoing financial crisis.
In reviewing the deposit and senior debt ratings, Moody's
will consider (i) the high probability of support that is available to
Portuguese banks and the probability of support once stability returns
to the markets, (ii) the systemic importance of the rated institutions,
(iii) the intrinsic financial strength of the rated institutions and (iv)
other sources of external support, in particular parental support.
Moody's expects the downgrades of the senior debt and deposit ratings
to be limited in most cases to one or possibly two notches, while
the downgrades of the BFSRs would likely be of a greater magnitude.
BANIF
The downgrade of Banif's ratings to Baa1/P-2/D+ (on
review for possible further downgrade) from A2/P-1/C- reflects
Moody's view that the majority of factors listed in the third paragraph
(above) are present at this institution and that the expected credit losses
and weak capitalisation levels are no longer commensurate with A2/P-1/C-
ratings.
Moody's also downgraded Banif's dated and undated subordinated
debt ratings to Baa2 and Baa3, respectively, from A3,
and its preferred securities rating to Ba1 from Baa1 as a result of the
downgrade of the bank's senior debt rating and the increased credit
risk of hybrid instruments for those institutions that are more likely
to need external support. As with the other financial institutions
listed above (aside from Banco Itau Europa), Banif's ratings
are on review for possible further downgrade, with the review focusing
on the same key issues.
ESPIRITO SANTO FINANCIAL GROUP
The downgrade of Luxembourg-based ESFG's issuer rating to
A2 (on review for possible further downgrade) from A1 reflects (i) the
placing of the ratings of ESFG's subsidiary Banco Espírito
Santo (BES, rated Aa3/P-1/C+) on review for downgrade
and (ii) Moody's assessment that the very high probability of systemic
support available to BES might not be extended to ESFG in case of need,
given that, during the ongoing financial crisis, the Portuguese
government has sometimes excluded holding companies from government support.
THE AFFECTED BANKS
The ratings of subsidiaries affected by these rating actions will be discussed
in a separate press release.
The following entities were downgraded and placed on review for further
possible downgrade:
Banif - Banco Internacional do Funchal SA
Espirito Santo Financial Group
The following entities were placed on review for possible downgrade:
Caixa Geral de Depositos
Banco Comercial Portugues
Banco Espírito Santo
Banco Santander Totta SA
Banco BPI
Caixa Económica Montepio Geral
The following entity's ratings were affirmed; the outlook on
its ratings was changed to negative from stable:
Banco Itau Europa SA
Below is the full list of the banks and related funding vehicles affected
by Moody's rating actions:
Downgrades:
..Issuer: BANIF -- Banco Internacional do Funchal,
S.A.
.Bank Financial Strength Rating, Downgraded to D+,
on review for possible downgrade, from C-.
.LT Bank Deposit, Downgraded to Baa1, on review for
possible downgrade, from A2
.ST Bank Deposit, Downgraded to Prime-2, on
review for possible downgrade, from Prime-1
.Senior Unsecured Debt Rating, Downgraded to Baa1,
on review for possible downgrade, from A2
.Dated Subordinate Debt Rating, Downgraded to Baa2,
on review for possible downgrade, from A3
.Undated Subordinate Debt Rating, Downgraded to Baa3,
on review for possible downgrade, from A3
..Issuer: Banif Finance, Limited
.Senior Unsecured Debt Rating, Downgraded to Baa1,
on review for possible downgrade, from A2
.Dated Subordinate Debt Rating, Downgraded to Baa2,
on review for possible downgrade, from A3
.Undated Subordinate Debt Rating, Downgraded to Baa3,
on review for possible downgrade, from A3
.Preferred Stock, Downgraded to Ba1, on review for
possible downgrade, from Baa1
..Issuer: Banif Sucursal Financeira Exterior
.Senior Unsecured Debt Rating, Downgraded to Baa1,
on review for possible downgrade, from A2
.Dated Subordinate Debt Rating, Downgraded to Baa2,
on review for possible downgrade, from A3
.Undated Subordinate Debt Rating, Downgraded to Baa3,
on review for possible downgrade, from A3
..Issuer: Espirito Santo Financial Group
.Issuer Rating, Downgraded to A2, on review for possible
downgrade, from A1
..Issuer: ESFG International Limited
.Preferred Stock, Downgraded to Baa1, on review for
possible downgrade, from A3
On Review for Possible Downgrade:
..Issuer: Caixa Geral de Depositos, SA
.Bank Financial Strength Rating, Placed on Review for Possible
Downgrade, currently C
.LT Bank Deposit, Placed on Review for Possible Downgrade,
currently Aa1
.Senior Unsecured Debt Rating, Placed on Review for Possible
Downgrade, currently Aa1
.Subordinate Debt Rating, Placed on Review for Possible Downgrade,
currently Aa2
..Issuer: Caixa Geral de Depositos SA (Madeira)
.Senior Unsecured Debt Rating, Placed on Review for Possible
Downgrade, currently Aa1
..Issuer: Caixa Geral de Depositos SA (Paris)
.Senior Unsecured Debt Rating, Placed on Review for Possible
Downgrade, currently Aa1
.Subordinate Debt Rating, Placed on Review for Possible Downgrade,
currently Aa2
..Issuer: Caixa Geral de Depositos Finance
.Senior Unsecured Debt Rating, Placed on Review for Possible
Downgrade, currently Aa1
.Subordinate Debt Rating, Placed on Review for Possible Downgrade,
currently Aa2
..Issuer: Caixa Geral de Depositos/New York
.LT Deposit Rating, Placed on Review for Possible Downgrade,
currently Aa1
..Issuer: Caixa Geral Finance Limited
.Preferred Stock, Placed on Review for Possible Downgrade,
currently Aa3
..Issuer: Banco Comercial Portugues, SA
.Bank Financial Strength Rating, Placed on Review for Possible
Downgrade, currently C+
.LT Bank Deposit, Placed on Review for Possible Downgrade,
currently Aa3
.Senior Unsecured Debt Rating, Placed on Review for Possible
Downgrade, currently Aa3
.Subordinate Debt Rating, Placed on Review for Possible Downgrade,
currently A1
.Preferred Stock, Placed on Review for Possible Downgrade,
currently A2
..Issuer: BCP Capital Finance Limited
.Preferred Stock, Placed on Review for Possible Downgrade,
currently A2
..Issuer: BCP International Bank Limited
.Backed Preferred Shelf, Placed on Review for Possible Downgrade,
currently (P) A2
..Issuer: BCP Finance Company
.Backed Subordinate Shelf, Placed on Review for Possible
Downgrade, currently (P) A1
.Preferred Stock, Placed on Review for Possible Downgrade,
currently A2
..Issuer: BCP Finance Bank Limited
.Senior Unsecured Debt Rating, Placed on Review for Possible
Downgrade, currently Aa3
.Subordinate Debt Rating, Placed on Review for Possible Downgrade,
currently A1
..Issuer: Banco Comercial Portugues SA (Madeira)
. .Senior Unsecured Debt Rating, Placed on Review
for Possible Downgrade, currently Aa3
.Subordinate Debt Rating, Placed on Review for Possible Downgrade,
currently A1
..Issuer: Banco Espirito Santo SA
.Bank Financial Strength Rating, Placed on Review for Possible
Downgrade, currently C+
.LT Bank Deposit, Placed on Review for Possible Downgrade,
currently Aa3
.Senior Unsecured Debt Rating, Placed on Review for Possible
Downgrade, currently Aa3
.Subordinate Debt Rating, Placed on Review for Possible Downgrade,
currently A1
..Issuer: BES Finance Limited
.Senior Unsecured Debt Rating, Placed on Review for Possible
Downgrade, currently Aa3
.Subordinate Debt Rating, Placed on Review for Possible Downgrade,
currently A1
.Preferred Stock, Placed on Review for Possible Downgrade,
currently A2
..Issuer: Espirito Santo Investment plc
.Senior Unsecured Debt Rating, Placed on Review for Possible
Downgrade, currently Aa3
.Subordinate Debt Rating, Placed on Review for Possible Downgrade,
currently A1
..Issuer: Banco Espirito Santo SA London branch
.Senior Unsecured Debt and Deposit Ratings, Placed on Review
for Possible Downgrade, currently Aa3
.Subordinate Debt Rating, Placed on Review for Possible Downgrade,
currently A1
..Issuer: Banco Espirito Santo SA Cayman branch
.Senior Unsecured Debt and Deposit Ratings, Placed on Review
for Possible Downgrade, currently Aa3
.Subordinate Debt Rating, Placed on Review for Possible Downgrade,
currently A1
..Issuer: Banco Espirito Santo SA Madeira branch
Senior Unsecured Debt and Deposit Ratings, Placed on Review for
Possible Downgrade, currently Aa3
.Subordinate Debt Rating, Placed on Review for Possible Downgrade,
currently A1
..Issuer: Banco Santander Totta SA
.Bank Financial Strength Rating, Placed on Review for Possible
Downgrade, currently C+
.LT Bank Deposit, Placed on Review for Possible Downgrade,
currently Aa3
.Senior Unsecured Debt Rating, Placed on Review for Possible
Downgrade, currently Aa3
.Subordinate Debt Rating, Placed on Review for Possible Downgrade,
currently A1
..Issuer: Banco Santander Totta SA, London
.Senior Unsecured Debt Rating, Placed on Review for Possible
Downgrade, currently Aa3
.Subordinate Debt Rating, Placed on Review for Possible Downgrade,
currently A1
..Issuer: Totta & Acores Financing Limited
.Preferred Stock, Placed on Review for Possible Downgrade,
currently A2
..Issuer: Banco BPI SA
.Bank Financial Strength Rating, Placed on Review for Possible
Downgrade, currently C
.LT Bank Deposit, Placed on Review for Possible Downgrade,
currently A1
.Senior Unsecured Debt Rating, Placed on Review for Possible
Downgrade, currently A1
.Subordinate Debt Rating, Placed on Review for Possible Downgrade,
currently A2
..Issuer: BPI Capital Finance Limited
.Senior Unsecured Debt Rating, Placed on Review for Possible
Downgrade, currently A1
.Subordinate Debt Rating, Placed on Review for Possible Downgrade,
currently A2
.Preferred Stock, Placed on Review for Possible Downgrade,
currently Baa1
..Issuer: Banco BPI SA (Cayman)
.Senior Unsecured Debt Rating, Placed on Review for Possible
Downgrade, currently A1
.Subordinate Debt Rating, Placed on Review for Possible Downgrade,
currently A2
..Issuer: Banco BPI SA (Santa Maria)
.Senior Unsecured Debt Rating, Placed on Review for Possible
Downgrade, currently A1
.Subordinate Debt Rating, Placed on Review for Possible Downgrade,
currently A2
..Issuer: Banco BPI SA (Madeira)
.Senior Unsecured Debt Rating, Placed on Review for Possible
Downgrade, currently A1
.Subordinate Debt Rating, Placed on Review for Possible Downgrade,
currently A2
..Issuer: Banco BPI SA (Macau Offshore)
.Senior Unsecured Debt Rating, Placed on Review for Possible
Downgrade, currently A1
.Subordinate Debt Rating, Placed on Review for Possible Downgrade,
currently A2
..Issuer: Banco BPI Cayman Limited
.Senior Unsecured Debt Rating, Placed on Review for Possible
Downgrade, currently A1
.Subordinate Debt Rating, Placed on Review for Possible Downgrade,
currently A2
..Issuer: Caixa Económica Montepio Geral
.Bank Financial Strength Rating, Placed on Review for Possible
Downgrade, currently C-
.LT Bank Deposit, Placed on Review for Possible Downgrade,
currently A2
.ST Bank Deposit, Placed on Review for Possible Downgrade,
currently Prime-1
.Senior Unsecured Debt Rating, Placed on Review for Possible
Downgrade, currently A2/P-1
.Subordinate Debt Rating, Placed on Review for Possible Downgrade,
currently A3
..Issuer: Caixa Económica Montepio Geral,
Cayman Islands Branch
.Senior Unsecured Debt Rating, Placed on Review for Possible
Downgrade, currently A2
.Subordinate Debt Rating, Placed on Review for Possible Downgrade,
currently A3
Outlook actions :
..Issuer: Banif --Banco Internacional do Funchal,
S.A.
.Outlook, Placed on Review for Possible Downgrade from Stable
..Issuer: Banif Finance, Limited
.Outlook, Placed on Review for Possible Downgrade from Stable
..Issuer: Banif Sucursal Financeira Exterior
.Outlook, Placed on Review for Possible Downgrade from Stable
..Issuer: Espirito Santo Financial Group
.Outlook, Placed on Review for Possible Downgrade from Stable
..Issuer: ESFG International Limited
.Outlook, Placed on Review for Possible Downgrade from Stable
..Issuer: Caixa Geral de Depositos, SA
.Outlook, Placed on Review for Possible Downgrade from Stable
..Issuer: Caixa Geral de Depositos SA (Madeira)
.Outlook, Placed on Review for Possible Downgrade from Stable
..Issuer: Caixa Geral de Depositos SA (Paris)
.Outlook, Placed on Review for Possible Downgrade from Stable
..Issuer: Caixa Geral de Depositos SA Finance
.Outlook, Placed on Review for Possible Downgrade from Stable
..Issuer: Caixa Geral de Depositos/New York
.Outlook, Placed on Review for Possible Downgrade from Stable
..Issuer: Caixa Geral Finance Limited
.Outlook, Placed on Review for Possible Downgrade from Stable
..Issuer: Banco Comercial Portugues, SA
.Outlook, Placed on Review for Possible Downgrade from Stable
..Issuer: BCP Capital Finance Limited
.Outlook, Placed on Review for Possible Downgrade from Stable
..Issuer: BCP International Bank Limited
.Outlook, Placed on Review for Possible Downgrade from Stable
..Issuer: BCP Finance Company
.Outlook, Placed on Review for Possible Downgrade from Stable
..Issuer: BCP Finance Portugal
.Outlook, Placed on Review for Possible Downgrade from Stable
..Issuer: Banco Comercial Portugues SA (Madeira)
.Outlook, Placed on Review for Possible Downgrade from Stable
..Issuer: Banco Espirito Santo SA
.Outlook, Placed on Review for Possible Downgrade from Stable
..Issuer: BES Finance Limited
.Outlook, Placed on Review for Possible Downgrade from Stable
..Issuer: Espirito Santo Investment plc
.Outlook, Placed on Review for Possible Downgrade from Stable
..Issuer: Banco Espirito Santo SA London branch
.Outlook, Placed on Review for Possible Downgrade from Stable
..Issuer: Banco Espirito Santo SA Cayman branch
.Outlook, Placed on Review for Possible Downgrade from Stable
..Issuer: Banco Espirito Santo SA Madeira branch
.Outlook, Placed on Review for Possible Downgrade from Stable
..Issuer: Banco Santander Totta SA
.Outlook, Placed on Review for Possible Downgrade from Stable
..Issuer: Banco Santander Totta SA, London
.Outlook, Placed on Review for Possible Downgrade from Stable
..Issuer: Totta & Acores Financing Limited
.Outlook, Placed on Review for Possible Downgrade from Stable
..Issuer: Banco BPI SA
.Outlook, Placed on Review for Possible Downgrade from Stable
..Issuer: BPI Capital Finance Limited
.Outlook, Placed on Review for Possible Downgrade from Stable
..Issuer: Banco BPI SA (Cayman)
.Outlook, Placed on Review for Possible Downgrade from Stable
..Issuer: Banco BPI SA (Santa Maria)
.Outlook, Placed on Review for Possible Downgrade from Stable
..Issuer: Banco BPI SA (Madeira)
.Outlook, Placed on Review for Possible Downgrade from Stable
..Issuer: Banco BPI SA (Macau Offshore)
.Outlook, Placed on Review for Possible Downgrade from Stable
..Issuer: Banco BPI Cayman Limited
.Outlook, Placed on Review for Possible Downgrade from Stable
..Issuer: Caixa Económica Montepio Geral
.Outlook, Placed on Review for Possible Downgrade from Stable
..Issuer: Caixa Económica Montepio Geral,
Cayman Islands Branch
.Outlook, Placed on Review for Possible Downgrade from Stable
..Issuer: Banco Itau Europa SA,
.Outlook , Changed to Negative from Stable
Moody's last rating action on Banif -- Banco Internacional do Funchal
SA was on 13 April 2007, when the bank's ratings were upgraded as
result of the implementation of Moody's Joint Default Analysis and BFSR
methodologies.
Moody's last rating action on Espirito Santo Financial Group was on 13
April 2007, when the bank's ratings were upgraded as result of the
implementation of Moody's Joint Default Analysis and BFSR methodologies.
Moody's last rating action on Caixa Geral de Depositos was on 13 April
2007, when the bank's ratings were upgraded as result of the implementation
of Moody's Joint Default Analysis and BFSR methodologies.
Moody's last rating action on Banco Comercial Portugues was on 13 April
2007, when the bank's ratings were upgraded as result of the implementation
of Moody's Joint Default Analysis and BFSR methodologies.
Moody's last rating action on Banco Espirito Santo was on 13 April 2007,
when the bank's ratings were upgraded as result of the implementation
of Moody's Joint Default Analysis and BFSR methodologies.
Moody's last rating action on Banco Santander Totta was on 13 April 2007,
when the bank's ratings were upgraded as result of the implementation
of Moody's Joint Default Analysis and BFSR methodologies.
Moody's last rating action on Banco BPI was on 13 April 2007, when
the bank's ratings were upgraded as result of the implementation of Moody's
Joint Default Analysis and BFSR methodologies.
Moody's last rating action on Caixa Economica Montepio Geral was on 13
April 2007, when the bank's ratings were upgraded as result of the
implementation of Moody's Joint Default Analysis and BFSR methodologies.
Moody's last rating action on Banco Itau Europa was on 27 April 2007,
when the bank's ratings were affirmed as result of the implementation
of Moody's Joint Default Analysis and BFSR methodologies.
The principal methodologies used in rating these issuers were the "Bank
Financial Strength Ratings: Global Methodology" and "Incorporation
of Joint-Default Analysis into Moody's Bank Ratings: A Refined
Methodology", which can be found at www.moodys.com
in the Credit Policy & Methodologies directory, in the Ratings
Methodologies sub-directory. Other methodologies and factors
that may have been considered in the process of rating these issuers can
also be found in the Credit Policy & Methodologies directory.
Headquartered in Lisbon, Caixa Geral de Depositos had total assets
of EUR111.1 billion at the end of December 2008.
Headquartered in Oporto, Banco Comercial Portugues had total assets
of EUR 94.4 billion at the end of December 2008.
Headquartered in Lisbon, Banco Espirito Santo had total assets of
EUR 75.2 billion at the end of December 2008.
Headquartered in Lisbon, Banco Santander Totta had (unaudited) total
assets of EUR 40.6 billion at the end of December 2008.
Headquartered in Lisbon, Banco BPI had (unaudited) total assets
of EUR 43.0 billion at the end of December 2008.
Headquartered in Lisbon, Caixa Economica Montepio Geral had total
assets of EUR 16.9 billion at the end of December 2008.
Headquartered in Funchal, Banif SA had (unaudited) total assets
of EUR7.8 billion at the end of December 2008.
Headquartered in Lisbon, Banco Itau Europa had (unaudited) total
assets of EUR 5.0 billion at the end of December 2008.
Headquartered in Luxembourg, Espirito Santo Financial Group had
(unaudited) total assets of EUR 78.1 billion at the end of December
2008.
London
Johannes Wassenberg
Managing Director
Financial Institutions Group
Moody's Investors Service Ltd.
JOURNALISTS: 44 20 7772 5456
SUBSCRIBERS: 44 20 7772 5454
Madrid
Olga Cerqueira
Analyst
Financial Institutions Group
Moody's Investors Service Espana, S.A.
JOURNALISTS: 44 20 7772 5456
SUBSCRIBERS: 44 20 7772 5454
Moody's announces multiple rating actions on Portuguese banks