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Bond Market News
Banco De Brasilia Downgraded to B- by S&P
November 20, 2025
Banco de Brasilia (BRB) was downgraded by a notch to B- from B by S&P. The action follows growing concerns over BRB’s risk management and governance, triggered by a Federal Police investigation into alleged fraud at Banco Master, the same institution from which BRB recently purchased a significant volume of loans. Banco do Brasil acquired BRL 18.6bn ($3.5bn) in loans in 1H2025, with an unknown, but likely sizeable portion coming from Banco Master. The investigation, combined with the suspension of BRB’s CEO and CFO, raises uncertainty over the quality of these acquired assets and broader governance practices. S&P notes that BRB has been pursuing aggressive growth amid tightening margins and a rigid cost base, increasing its risk profile. The agency highlights uncertainty around how the investigation could affect the bank’s reputation, capital, liquidity, funding, and asset quality. As a result, S&P sees a 50% probability of a further downgrade within 90 days.
Its dollar bonds traded stable with its 6.25% 2030s at 103.4, yielding 5.4%.
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