Fitch downgrades Itaú Unibanco

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Tuesday, March 13, 2018

Fitch Ratings downgraded Itaú Unibanco Holding and Itaú Unibanco following a recent cut to the sovereign rating.

Fitch lowered Itaú's viability ratings to BB from BB+, which means the ratings continue to be one notch higher than the sovereign rating.

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"The ratings reflect the issuers' very strong credit profile, adequate loss absorption capacity, high liquidity and stable and diversified funding base," said the rating agency.

"Fitch believes that these entities will be able to withstand a further deterioration in the operating environment," it added.

In February, Fitch downgraded Brazil's sovereign rating to BB- from BB after the government failed to approve a pension reform, which was considered crucial to reduce government spending and debt in the long-term.

Itaú Unibanco is the largest private sector in the Brazilian financial system. It also has big insurance operations.