Brazil’s private sector feeling December heat


8th December 2015

Last week, Fitch joined Moody’s and Standard & Poor’s in downgrading crisis-struck BTG Pactual, the region’s 11th largest bank by assets, according to Latin Trade’s latest Top 100 Banks ranking.
The downgrade marks the latest blow to Brazil’s private sector amid the Petrobras scandal and President Dilma Rousseff’s impeachment process, which began last week after she was accused of illegal accounting in the government’s handling of the federal budget. Grupo BTG was hit by the arrest of its founder and former controlling shareholder André Esteves on November 25 as part of Operation Lava Jato (car wash), the ongoing investigation into Petrobras corruption charges. The prosecution alleges that Esteves, along with a senator, tried to obstruct justice in the investigation.
But BTG is still third among the companies with the most volume traded in the Brazilian stock exchange in November this year, with an average of $21.7 million per day during the month, according to Economatica. The top five of the most traded shares in Brazil during November are Bradesco, Cetip, Hypermarcas and Braskem. Other top trading companies include Eletrobrás, Tran Paulist, Energías BR and SLC Agrícola.
Since the resignation of Esteves, BTG bank has announced it will be selling assets, including its credit portfolio worth $5.8 billion, and BSI, a Swiss private-banking unit it had acquired three months ago.
A year of downgrades and lackluster performance
As …

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