Banco Fibra's Basel III ratio reached 10.8% as of March 2017. The drop in comparison with December 16 figure of 12.5% is due to regulatory deductions related to deferred tax assets (DTAs) added to the bank's weak internal capital generation. We believe the Brazil-based midsize bank is now at risk of reaching the minimum regulatory ratio of 10.5%, which sharply increases its vulnerability to a regulatory breach. However, we believe the bank has enough liquid assets to cope with its obligations within the next 12 months. As a result, we lowered the bank's stand-alone credit profile (SACP) to 'ccc+' from 'b-', given that the bank's capital is at risk. However, we affirmed our 'B-/B' global scale and 'brB-/brC' national scale
