Moody's downgrades Banco Cruzeiro do Sul's rating.
Yesterday, the Central Bank decreed intervention in the institution for a period of 180 days and appointed the Credit Guarantee Fund (FGC) as temporary special administrator; the Federal Police also opened an investigation to look into the crime of fraudulent management.
Agency Brazil - Moody's, a risk rating agency, downgraded Banco Cruzeiro do Sul's ratings from E+ to E on Tuesday, maintaining a negative outlook. Yesterday (4), the Central Bank (BC) decreed intervention in the bank for a period of 180 days and appointed the Credit Guarantee Fund (FGC) as temporary special administrator.
According to the Central Bank, the measure was taken due to "non-compliance with applicable financial system regulations and the verification of insufficient assets." The Central Bank clarified that the intervention does not affect the institution's business operations, which continue to function normally and can carry out all operations for which it is authorized.
Yesterday, the FGC (Credit Guarantee Fund) reported that it did not inject funds into Banco Cruzeiro do Sul. And, according to the FGC's executive director, Antônio Carlos Bueno, it is not expected to do so. According to him, the bank is not experiencing cash flow problems, but rather equity problems.
According to the executive director of the FGC (Credit Guarantee Fund), Antônio Carlos Bueno, only after an audit will it be possible to know the real value of the "unsubstantiatedness" pointed out by the Central Bank. He stressed, however, that the bank has cash on hand and liquidity. "Those who owned the bank, the bank's shareholders, lost their assets. But all the money that was there, with the CDBs [Bank Deposit Certificates], the loan portfolios, are all still there and functioning," he said.
According to the Central Bank, Banco Cruzeiro do Sul is a small financial institution that, in December 2011, held assets representing only 0,22% of the total assets of the financial system and 0,35% of deposits. It is authorized to operate with commercial, investment, and foreign exchange portfolios. With operations concentrated in its two branches in São Paulo and Rio de Janeiro, the bank has six more branches located in Campinas, Salvador, Recife, Belém, Macapá, and Palmas.
The Federal Police yesterday opened an investigation to look into the alleged crime of fraudulent management by the controllers of Banco Cruzeiro do Sul.