Brazilian Sale Reduces Ratings Pressure on BBVA
Banco Bilbao Vizcaya Argentaria has sold its Brazilian affiliate BBV Banco to Banco Bradesco, S.A. for Brazilian reais 2 billion in cash plus 4.5% of Bradesco’s share capital. The Spanish bank had already amortized the $491 million in goodwill generated in its Brazilian investments. The remaining loss on the transaction has already been charged against reserves as a result of the depreciation of the Brazilian real since BBVA’s initial investment in 1998. Ratings agency Standard & Poor’s said the sale ‘effectively diminished the downward pressure on the bank’s ratings’. The bank’s negative outlook continues to reflect, however, BBVA’s exposure to heightened economic risk in Latin America.