SAO PAULO--(BUSINESS WIRE)--Fitch Ratings considers the announced acquisition of Banco Commercial Investment Trust do Brasil S.A. (CIT Brasil) by Banco Daycoval S.A. (Daycoval), neutral to Daycoval's ratings.
On Dec. 11, 2014, Daycoval announced the signing of a definitive agreement to acquire CIT Brasil, a bank focused on the corporate and SME market, which offers equipment leasing focused on the IT industry. The rationale for the transaction is an opportunity to diversify Daycoval's product portfolio and better serve its SME client base.
Given Daycoval's comfortable liquidity position with Liquid assets around BRL3.2 billion and its comfortable capitalization (Fitch Core Capital ratio of 18.6% as of September 2014), the acquisition will have no major impact on the bank's liquidity and capitalization position when it is concluded, which should take from 6-9 months until all regulatory approvals are granted.
CIT Brasil is a quite small institution with equity of BRL268 million, gross loans of BRL464 million and total assets of BRL711 million as of June 2014, representing roughly 11%, 5% and 4% of Daycoval's equity, gross loans and total assets, respectively.
Daycoval's good access to funding and stronger franchise in the Brazilian market should allow the bank to better explore the leasing product with Brazilian companies in need of equipment financing.
Fitch currently rates Daycoval as follows:
--Long-term foreign and local currency Issuer Default Ratings (IDRs) 'BBB-', Outlook Stable;
--Short-term foreign and local currency IDRs 'F3';
--Viability rating 'bbb-';
--Long-term national rating 'AA(bra)', Outlook Stable;
--Short-term national rating F1+(bra)';
--Support rating affirmed at '5';
--Support rating floor 'NF';
--Senior unsecured USD notes due March 2015, foreign currency rating 'BBB-';
--Senior unsecured USD notes due January 2016, foreign currency rating 'BBB-'.
--Senior unsecured USD notes due March 2019, foreign currency rating 'BBB-'
--Senior unsecured BRL letras financeiras due 2015 and 2016 at 'AA(bra).
Additional information is available at 'www.fitchratings.com'.