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Brazilian Retail Banks' Quest for Greater Efficiency May 03
Standard & Poors, May 2003
Abstract
When assigning ratings to financial institutions, one of the most important aspects considered by Standard & Poor's Ratings Services regarding the profitability analysis is the historical consistency of the institution's efficiency. The understanding of the efficiency can vary among analysts. One can choose ratios like employees-to-branches, assets-to-employees, net income-to-employees, and so on. It is possible to build a wide range of indicators. The most important is to establish the comparable banks; for instance, not to compare an investment bank with a commercial or retail bank. One of Standard & Poor's ratios when measuring efficiency is based on the operational expenses (general and personnel expenses)-to-the net operational revenues. When analyzing using this indicator exclusively, Brazilian institutions historically have been negatively affected....
Companies mentioned in this report are: HSBC Bank PLC,The Royal Bank of Scotland N.V.,The Royal Bank of Scotland PLC,Banco Nacional de Mexico S.A.,Banco de Chile,Banco Bradesco S.A.,Unibanco-Uniao de Bancos Brasileiros, S.A.,Kookmin Bank,Banco General S.A.,Banco Santander-Chile S.A.,Banco Santander Mexicano S.A.,Itau Unibanco Holding S.A.,Banco HSBC Salvadoreno S.A.
Standard and Poors RatingsXpress Credit Research provides in-depth coverage of international corporates, financial institutions, insurance companies, utilities, sovereigns and structured finance programs. RatingsXpress Credit Research lets users determine the credit rating of holdings and identify key factors underlying an issuer's creditworthiness, distinguishes the different risk exposures for new and existing deals, and provides an understanding of how their analysts interpret key regulatory, political and environmental events and their economic impact.
Research Type: Commentary
Criteria articles describe the thought process and methodology Standard & Poor's analysts use in determining ratings. These commentary pieces discuss both the quantitative (economic and financial) and qualitative (business analysis and caliber of management) aspects of the analysis, as well as legal issues.
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