The ratings on Portugal-based Banco Espirito Santo de Investimento, S.A. (BESI) are underpinned by Standard&Poor's Ratings Services' view of BESI's core status to Banco Espirito Santo, S.A. (BES; BBB-/Negative/A-3). They also benefit from BESI's strong position in investment banking in Portugal, increasing geographic diversification, positive profitability prospects from its international operations, and Portuguese authorities' supportive stance--within the EU framework--toward the country's financial system. However, the ratings also reflect our view of the tough economic, financial, and operating environment in Portugal and the negative impact we expect it to have on the bank's financials. Further constraints are BESI's vulnerability to challenging funding markets, given its structurally high liquidity risk; its predominantly market-related revenue base, which introduces volatility risk into
