(The following statement was released by the rating agency)
RIO DE JANEIRO, July 22 (Fitch) Fitch Ratings has affirmed the following
national ratings of Banco Caixa Geral-Brasil S.A. (BCG-Brasil):
--National long-term rating at 'A+(bra)', Outlook Negative;
--National short-term rating at 'F1(bra)'.
KEY RATING DRIVERS
BCG-Brasil's national ratings are linked to the ratings of its parent, Caixa
Geral de Depositos (CGD; long-term Issuer Default Rating 'BB+'; Outlook
Negative). The Negative Outlook for its long-term national rating mirrors the
outlook on CGD's long-term IDR. In turn, CGD is fully controlled by the
government of Portugal (foreign and local currency IDRs 'BB+'; Outlook
Fitch considers BCG-Brasil as a strategically important subsidiary of CGD, due
to the high level of operational and managerial integration and strong synergies
between the two banks, and their common branding. The so far unutilized EUR120
million standby credit facility made available by the parent also demonstrates
CGD's commitment to BCG-Brasil.
BCG-Brasil's client base comprises large Brazilian corporates both operating
domestically and expanding abroad, and CGD's international clients operating in
Brazil. It works very closely with CGD's investment banking arm, with which it
also jointly owns the brokerage firm CGD Investimentos Corretora de Valores e
At year-end 2012, growth of loans and guarantees was solid (27% and 35% in
comparison to end-2011) and impaired loans (those classified between 'D-H' as
per the central bank's definitions) declined back to 0% of gross loans (7.1% in
2011), but credit risk concentration remained high. Performance continues to be
adequate, despite lower net interest margins (ROAA 1.1% and 1.5%, in 2012 and
Except for the standby credit line, BCG-Brasil had no non-equity funding from
CGD at year-end 2012 (this increased to 12% of total funding at June 2013,
according to preliminary numbers). In 2012, funding increased significantly,
mainly through customer and interbank deposits, which were, partly, driven by
the changes in the compulsory deposit requirements. However, the funding base
remained concentrated, with the 10 largest depositors accounting for 62% of
total funding in 2012 (52% in 2011), with the funding from the brokerage
subsidiary representing 18% of total.
BCG-Brasil has high liquidity and capitalization. With a Fitch core capital
ratio of 26.04%, there is sufficient room for BCG-Brasil to achieve its growth
Any changes in CGD's ratings and outlook, or in its willingness to provide
support would directly affect BCG-Brasil's ratings and outlook.
+55 21 4503 2626
Fitch Ratings Brasil Ltda.
Praca XV de Novembro, 20 - 401 B
Rio de Janeiro, RJ, Brasil
+55 11 4504 2206
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Additional information is available at 'www.fitchratings.com'.
Applicable Criteria and Related Research:
-- National Ratings Criteria (Jan. 19, 2011);
-- Rating FI Subsidiaries and Holding Companies (Aug. 10, 2012);
-- Global Financial Institutions Rating Criteria (Aug. 15, 2012);
-- Rating Action Commentary: Fitch Affirms Major Portuguese Banks, Outlook
Negative (July 2013).
Applicable Criteria and Related Research:
National Ratings Criteria
Rating FI Subsidiaries and Holding Companies
Global Financial Institutions Rating Criteria
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