Moody\'s Investors Service assigned a bank
financial strength rating (BFSR) of E+ (E plus) to Banco Bandes Uruguay
S.A (Bandes Uruguay), a wholly-owned subsidiary of Banco de Desarrollo
Económico y Social de Venezuela (Bandes).
Moody\'s also assigned long- and short-term global local-currency deposit
ratings of B2 and Not Prime, as well as long- and short-term
foreign-currency deposit ratings of B2 and Not Prime. At the same time,
Moody\'s assigned long-term national scale local- and foreign-currency
deposit ratings of Baa1.uy. The outlook on the ratings is stable.
Moody\'s noted that the E+ BFSR reflects the bank\'s still-weak financial
fundamentals as well as the transitional risk inherent to the recent
acquisition of all assets and liabilities of Cooperativa Nacional de
Ahorro y Credito (COFAC). The bank\'s network in Uruguay could provide
access to business opportunities within the targeted segments of
cooperatives, and medium and small companies. However, as a subsidiary of
a Venezuelan state-owned development bank, Bandes Uruguay may be asked to
provide support to certain policy lending and other activities that may
limit its ability to generate earnings. Asset allocation and
profitability, therefore, could be impaired as a result of its policy
role for the Government of Venezuela.
Moody\'s B2 global local-currency deposit rating incorporates the bank\'s
baseline risk assessment of B3 and is lifted by one notch to B2 by
Moody\'s assessement of the very high probability of support from its
parent bank, Bandes. Moody\'s considers Uruguay to be a low support
country, therefore, no systemic support is assessed to Bandes Uruguay\'s
global local currency rating because of its modest share in the deposits
market. Bandes has provided support to the Uruguayan subsidiary through
capital injections and funding; Moody\'s believes this support would
continue. Its parent had US$ 4.7 billion in assets and US$ 4.5 billion in
equity as of April 2007.
Bandes Uruguay is a universal bank, distributed throughout the country.
As of April 2007, it had US$ 293 million in assets and US$ 40 million in
equity.
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