Reuters logo
Fitch Reviews Ratings of 4 Banks Controlled by Brazilian Subnationals
August 21, 2017 / 7:35 PM / a month ago

Fitch Reviews Ratings of 4 Banks Controlled by Brazilian Subnationals

(The following statement was released by the rating agency) RIO DE JANEIRO/SAO PAULO, August 21 (Fitch) Fitch Ratings has taken various rating actions on the following banks controlled by Brazilian subnationals: -- Banestes S.A. - Banco do Estado do Espirito Santo (Banestes); -- Banco do Estado de Sergipe S.A. (Banese); -- Banco do Estado do Rio Grande do Sul S.A. (Banrisul); -- BRB - Banco de Brasilia S.A. (BRB). For further details on these banks, the rating actions, rating drivers and sensitivities, as well as regulatory information, please see the individual press releases for each institution published and available at 'www.fitchratings.com' and 'www.fitchratings.com.br'. The IDRs (Issuer Default Ratings) of Banestes and Banrisul and Banese's National Ratings are driven by their standalone performance. BRB's IDRs are driven by support from Brasil's Federal District. Fitch assesses the respective financial and economic standing of each bank's controlling subnational as the main shareholder and, given their strong performance in the region of their controllers, such assessments can influence these banks' ratings. The credit profiles of these four banks remain highly sensitive to further operating environment deterioration in the respective regions where their operations are concentrated. The Outlooks for Banestes and BRB's IDR remain Negative, because Fitch understands that given the level of the IDRs of both entities, they could be impacted by any further deterioration in the operating environment. For Banese, Fitch only assigns a National Rating, which had its Outlook revised to Stable due to the substantial improvement of the bank's profitability metrics in 2016 and early 2017. The revision of Banrisul's Outlook to Stable from Negative reflects the recent stabilization of the credit profile of the state of Rio Grande do Sul (ERS), the main shareholder of the institution, which in Fitch's view could result in better prospects for asset quality for the bank due to its regional importance. Fitch has a more stable view of ERS' economic and operating environment, which is where most of the bank's operations are concentrated. These four institutions operate as commercial banks oriented toward both companies and individuals. Their performance is strong in the region of their controlling subnational. With strong franchises, they offer a wide array of banking products that allows them to compete in their regions against larger banks with nationwide operations. These four banks heavily service public servants, are concentrated in their regions and could be affected by any potential difficulties faced by subnationals to pay their obligations. Similar to other state-owned companies, the strategies and targets of these four banks can be influenced by the state's economic-financial situation and by political guidelines from their respective main shareholders, although their activities are performed with relative autonomy. In addition, the governmental changes that happen every four years can lead to more frequent changes in the state-owned banks' executive boards than their private peers. As a general rule, these banks have reduced their appetite for growth and have shown more modest growth ratios than in the past. Contact: Contact: Jean Lopes (Primary Analyst: Banrisul, Banese and Banestes) Director +55 21 4503-2617 Fitch Ratings Brasil Ltda. Praca XV de Novembro, 20 - Room 401 B - Centro Rio de Janeiro - RJ - CEP: 20010-010 Esin Celasun (Primary Analyst: BRB) Director +55 21 4504-2626 Paulo Fugulin (Secondary Analyst: Banestes, BRB, Banrisul, Banese) Director +55 11 4504-2206 Fitch Rating Brasil Ltda. Alameda Santos, 700 - 7th floor - Cerqueira Cesar Sao Paulo - SP - CEP: 01418-100 Committee Chairperson Veronica Chau Senior Director + 52 81 8399 9169 Media Relations: Elizabeth Fogerty, New York, Tel: +1 (212) 908 0526, Email: elizabeth.fogerty@fitchratings.com. Additional information is available on www.fitchratings.com ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: here. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEB SITE AT WWW.FITCHRATINGS.COM. PUBLISHED RATINGS, CRITERIA, AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE, AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE CODE OF CONDUCT SECTION OF THIS SITE. DIRECTORS AND SHAREHOLDERS RELEVANT INTERESTS ARE AVAILABLE here. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE. Copyright © 2017 by Fitch Ratings, Inc., Fitch Ratings Ltd. and its subsidiaries. 33 Whitehall Street, NY, NY 10004. Telephone: 1-800-753-4824, (212) 908-0500. Fax: (212) 480-4435. Reproduction or retransmission in whole or in part is prohibited except by permission. All rights reserved. In issuing and maintaining its ratings and in making other reports (including forecast information), Fitch relies on factual information it receives from issuers and underwriters and from other sources Fitch believes to be credible. Fitch conducts a reasonable investigation of the factual information relied upon by it in accordance with its ratings methodology, and obtains reasonable verification of that information from independent sources, to the extent such sources are available for a given security or in a given jurisdiction. The manner of Fitch’s factual investigation and the scope of the third-party verification it obtains will vary depending on the nature of the rated security and its issuer, the requirements and practices in the jurisdiction in which the rated security is offered and sold and/or the issuer is located, the availability and nature of relevant public information, access to the management of the issuer and its advisers, the availability of pre-existing third-party verifications such as audit reports, agreed-upon procedures letters, appraisals, actuarial reports, engineering reports, legal opinions and other reports provided by third parties, the availability of independent and competent third- party verification sources with respect to the particular security or in the particular jurisdiction of the issuer, and a variety of other factors. Users of Fitch’s ratings and reports should understand that neither an enhanced factual investigation nor any third-party verification can ensure that all of the information Fitch relies on in connection with a rating or a report will be accurate and complete. Ultimately, the issuer and its advisers are responsible for the accuracy of the information they provide to Fitch and to the market in offering documents and other reports. In issuing its ratings and its reports, Fitch must rely on the work of experts, including independent auditors with respect to financial statements and attorneys with respect to legal and tax matters. Further, ratings and forecasts of financial and other information are inherently forward-looking and embody assumptions and predictions about future events that by their nature cannot be verified as facts. As a result, despite any verification of current facts, ratings and forecasts can be affected by future events or conditions that were not anticipated at the time a rating or forecast was issued or affirmed. The information in this report is provided “as is” without any representation or warranty of any kind, and Fitch does not represent or warrant that the report or any of its contents will meet any of the requirements of a recipient of the report. A Fitch rating is an opinion as to the creditworthiness of a security. This opinion and reports made by Fitch are based on established criteria and methodologies that Fitch is continuously evaluating and updating. Therefore, ratings and reports are the collective work product of Fitch and no individual, or group of individuals, is solely responsible for a rating or a report. The rating does not address the risk of loss due to risks other than credit risk, unless such risk is specifically mentioned. Fitch is not engaged in the offer or sale of any security. All Fitch reports have shared authorship. Individuals identified in a Fitch report were involved in, but are not solely responsible for, the opinions stated therein. The individuals are named for contact purposes only. A report providing a Fitch rating is neither a prospectus nor a substitute for the information assembled, verified and presented to investors by the issuer and its agents in connection with the sale of the securities. Ratings may be changed or withdrawn at any time for any reason in the sole discretion of Fitch. Fitch does not provide investment advice of any sort. Ratings are not a recommendation to buy, sell, or hold any security. Ratings do not comment on the adequacy of market price, the suitability of any security for a particular investor, or the tax-exempt nature or taxability of payments made in respect to any security. Fitch receives fees from issuers, insurers, guarantors, other obligors, and underwriters for rating securities. Such fees generally vary from US$1,000 to US$750,000 (or the applicable currency equivalent) per issue. In certain cases, Fitch will rate all or a number of issues issued by a particular issuer, or insured or guaranteed by a particular insurer or guarantor, for a single annual fee. Such fees are expected to vary from US$10,000 to US$1,500,000 (or the applicable currency equivalent). The assignment, publication, or dissemination of a rating by Fitch shall not constitute a consent by Fitch to use its name as an expert in connection with any registration statement filed under the United States securities laws, the Financial Services and Markets Act of 2000 of the United Kingdom, or the securities laws of any particular jurisdiction. Due to the relative efficiency of electronic publishing and distribution, Fitch research may be available to electronic subscribers up to three days earlier than to print subscribers. For Australia, New Zealand, Taiwan and South Korea only: Fitch Australia Pty Ltd holds an Australian financial services license (AFS license no. 337123) which authorizes it to provide credit ratings to wholesale clients only. Credit ratings information published by Fitch is not intended to be used by persons who are retail clients within the meaning of the Corporations Act 2001

Our Standards:The Thomson Reuters Trust Principles.
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below