Talk to the hand

9 November 2010 By Neil Unmack Follow @unmack1

Banco Espirito Santo has sacked Fitch after the agency said the bank didn’t merit an A rating. Fitch remains less bearish than markets on Portuguese banks, and has only stated the truth that the sector is vulnerable to a sovereign crisis. BES has achieved little by hitting back.

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Banco Espírito Santo said it would terminate its contract with Fitch Ratings after the agency downgraded BES two notches to BBB+ from A, citing funding and liquidity risks. It was Fitch's second downgrade of the bank since July.

"The BBB+ Fitch rating does not reflect the financial soundness of the Bank," BES said in a statement. "BES has proved to be in a strong position, allowing the Bank to face the current challenges with a sound fundamental profile."

The lender added: " There is no valid justification for a three notches downgrade in less than four months. Thus the Board of Directors decided to terminate the contract with Fitch Ratings as a result of these rating actions," the statement said.

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