The ratings are underpinned by Banco Espirito Santo de Investimento, S.A.'s (BESI) full ownership by and integration within Banco Espirito Santo S.A. (BES, A-/Stable/A-2). They also benefit from BESI's strong position in investment banking in Portugal, sound stand-alone capitalization, and adequate asset quality. Counterbalancing these factors are BESI's predominantly market-related revenue base, which introduces volatility risk into returns; meaningful credit exposure (relative to core capital) to inherently riskier Brazilian debtors, mainly through its majority-owned Brazilian subsidiary; and high risk concentration (relative to core capital) in the biggest borrowers. BESI's core status within the BES group is underpinned by its full ownership by and integration within BES; the bank effectively operates as a division within BES' wholesale activities. Credit and market
