Fitch Affirms Ratings of 3 Brazilian Subsidiaries of European Banks

SAO PAULO--()--Fitch Ratings has affirmed the ratings of three Brazilian subsidiaries of European investment banks: Banco Barclays S.A. (BBSA), Banco de Investimentos Credit Suisse (Brasil) S.A. (BICS), and Deutsche Bank S.A. Banco Alemao (DBSA).

The rating actions follow a periodic review of the three banks. The three banks operate in the Investment banking field in Brazil and face a fierce competitive environment as local players have grown and occupied leading positions in Investment Banking, Trading, Corporate Lending and Asset Management. To a larger or lesser extent each of the banks reviewed are affected by the scenario of more strict control over investment banking and trading activity in Europe and the pressures to optimize capital use and deleverage the balance sheets as to comply with increasingly strict capital rules.

KEY RATING DRIVERS

Banco Barclays S.A. (BBSA)

The affirmation of BBSA's foreign currency and local currency IDRs and national ratings reflect the support from its parent, Barclays Bank Plc (BPLC; Fitch IDR 'A'; Outlook Stable). Fitch views BBSA as a 'strategically important' subsidiary of BPLC, as evidenced by the high integration, strong operational and managerial synergies and the common branding.

BBSA has a relatively modest presence in the Brazilian investment banking market. It mainly focuses on securities operations and investment banking. It has an active proprietary trading desk and is also active in the derivatives, foreign exchange, government bonds and commodities markets.

After carrying out investments in qualified personnel and technology over the last years as to back up its growth plans and market share expansion, the bank has shown a less ambitious appetite and scaled back some of its ambitious growth plans in order to align its strategy with its parent's. A closer integration between business areas has been the main goal pursued by the management.

Banco de Investimentos Credit Suisse (Brasil) S.A. (BICS)

BICS' National Ratings reflect the institutional and financial support from its controlling shareholder Credit Suisse AG (CSAG, IDR 'A'; Outlook Stable). Fitch views BICS as a 'strategically important' subsidiary of CSAG, as evidenced by the strong integration and synergies, common branding and consistent performance of BICS over the years.

BICS is a leading player in the Brazilian investment banking market, counting on a strong franchise and ample knowledge of the local market. The bank faces fierce competition from local investment banks, which have rapidly grown and enhanced their distribution capabilities.

BICS counts on a solid asset management business having considerably expanded its presence after the acquisition of Hedging Griffo, which started in 2007 and was finalized in the 1H12. This has allowed BICS to strengthen its asset management and private banking considerably.

Deutsche Bank S.A. Banco Alemao (DBSA)

DBSA's ratings reflect the support provided by its controlling shareholder Deutsche Bank AG (DBAG, IDR 'A+'; Outlook Stable). Fitch views DBSA as a 'strategically important' subsidiary to DBAG, considering its operational integration, shared controls and policies and common brand.

DBSA benefits from its parent's strong franchise and global distribution capability to access and originate business with the largest companies operating in Brazil. The bank also shares risk controls, systems and policies with the team reporting to the parent in addition to local report lines.

DBDSA focuses its business activities in services, including FX transactions, brokerage, custody, cash management and investment banking advisory. The bank also has an active treasury, offering a wide range of derivatives and structured products to its clients.

RATING SENSITIVITIES -

BBSA

Given that BBSA's FC IDR is constrained by Brazil's country ceiling upside potential is limited. Negative changes in BPLC's IDRs or its willingness and capacity to support BBSA would negatively affect BBSA's ratings.

BICS

Negative changes in CSAG's IDRs or its willingness and capacity to support BICS would negatively affect BICS' ratings.

DBSA

Negative changes in DBAG's IDRs or its willingness and capacity to support DBSA would negatively affect DBSA's ratings.

Fitch has affirmed the ratings for BBSA, BICS and DBSA as follows:

BBSA

--Long-term Issuer Default Rating (IDR) at 'BBB+'; Outlook Stable;

--Short-term IDR at 'F2';

--Long-term local currency IDR at 'A-'; Outlook Stable;

--Short-term local currency IDR at 'F1';

--Support Rating at '2';

--National long-term rating at 'AAA(bra)'; Outlook Stable;

--National short-term rating at 'F1+(bra)'.

BICS

--National long-term rating at 'AAA(bra)'; Outlook Stable;

--National short-term rating at 'F1+(bra)'.

DBSA

--National long-term rating at 'AAA(bra)'; Outlook Stable;

--National short-term rating at 'F1+(bra)'.

Additional information available at 'www.fitchratings.com' or 'www.fitchratings.com.br'.

Applicable Criteria and Related Research:

--'Global Financial Institutions Methodology' (Aug. 15, 2012);

--'National Ratings Methodology' (Jan. 19, 2011);

--'Securities Firms Criteria' (Aug. 15, 2012);

--'Rating FI Subsidiaries and Holding Companies' (Aug. 10, 2012).

Applicable Criteria and Related Research:

Global Financial Institutions Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=686181

National Scale Ratings Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=720082

Securities Firms Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=686137

Rating FI Subsidiaries and Holding Companies

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=679209

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=818352

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Contacts

Fitch Ratings
Primary Analyst (BBSA, BICS and DBSA)
Eduardo Ribas
Associate Director
+55-11-4504-2213
Fitch Ratings Brasil Ltda.
Alameda Santos, 700 - 7th floor - Sao Paulo - SP - CEP: 01418-100
or
Secondary Analyst (BBSA)
Esin Celasun
Associate Director
+55-11-4503-2626
or
Secondary Analyst (BICS and DBSA)
Claudio Gallina
Director
+55-11-4504-2216
or
Committee Chairperson
Alejandro Garcia
Senior Director
+52-81-8399-9146
or
Media Relations:
Elizabeth Fogerty, New York, +1 212-908-0526
Email: elizabeth.fogerty@fitchratings.com

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Contacts

Fitch Ratings
Primary Analyst (BBSA, BICS and DBSA)
Eduardo Ribas
Associate Director
+55-11-4504-2213
Fitch Ratings Brasil Ltda.
Alameda Santos, 700 - 7th floor - Sao Paulo - SP - CEP: 01418-100
or
Secondary Analyst (BBSA)
Esin Celasun
Associate Director
+55-11-4503-2626
or
Secondary Analyst (BICS and DBSA)
Claudio Gallina
Director
+55-11-4504-2216
or
Committee Chairperson
Alejandro Garcia
Senior Director
+52-81-8399-9146
or
Media Relations:
Elizabeth Fogerty, New York, +1 212-908-0526
Email: elizabeth.fogerty@fitchratings.com