S&P: Banco Citibank Global Scale 'BB/B' And National Scale 'brAA-/brA-1' Ratings Affirmed; Outlook Remains Negative
Banco Citibank is a Brazil-based universal bank with a wide range of banking products and focuses on corporate and investment banking activities. The bank's ratings on reflects its adequate business position thanks to its diversified business portfolio and the competitive advantage of belonging to a large and international banking group; moderate capital and earnings underpinned by our forecasted risk-adjusted capital (RAC) ratio of 5.7% for the next 18 months; moderate risk position; average funding; and adequate liquidity. The bank's stand-alone credit profile (SACP) remains at 'bb'.
We view Banco Citibank as a highly strategic subsidiary for its U. S.-based parent, Citigroup Inc. (BBB+/Stable/A-2). Banco Citibank is the group's fifth-largest subsidiary in terms of revenue. It's Citigroup's largest corporate & investment banking (CIB) franchise in Latin America. Despite Banco Citibank's plan to sell its retail portfolio, we believe the bank's strategy is aligned with that of its parent by focusing on the CIB segment. We believe that the parent will provide support to Banco Citibank when necessary. As a result of the highly strategic status, Banco Citibank could stand one notch below Citigroup's group credit profile, but its rating is currently capped at Brazil's 'BB' foreign currency rating. Therefore, even if the bank's rating factors weaken to the point where we lower its SACP, we would only downgrade Banco Citibank if we downgrade the sovereign or our view of the parent's support changes.