Fitch Ratings has affirmed Banco Rabobank International Brasil S.A's (Rabobank) ratings as follows:
--National long-term rating at 'AAA(bra)', Outlook Stable;
--National short-term rating at 'F1+(bra)';
--Support rating at '2'.
The affirmation of Rabobank's national ratings reflects the support of its shareholder, the Rabobank Group (RBG, IDR 'AA+'; Outlook Stable). Fitch believes there is a high probability that Rabobank would receive support from the parent, if necessary, due to the capacity and propensity of RBG to provide such support. The Stable Outlook reflects the maintenance of the support offered by Rabobank Group. Any changes in the parent's ratings or in its support to this local subsidiary could lead to a review in Rabobank's ratings. Nevertheless, RBG's ratings are among the highest on Fitch's international scale and even if they were downgraded by a few notches, the impact on the local bank would be limited.
Fitch also notes that the group has a well-defined global strategy, with thorough expertise in its main business markets and a conservative posture. These factors compensate for the concentration of the bank's business in Brazil.
Albeit Rabobank represents less than 1% of RBG's assets, Brazil has been a strategic target for the expansion of the group's credit operations, due to its relevance in agricultural sectors. The bank has been expanding its activities since 2010, driven by the sustained demand from clients in the major business segments, corporate and rural. Fitch notes that the bank's focus and concentration on the agricultural, livestock and food sectors require attention. This is due to the fact that performance in these sectors is very volatile and subject to strong climatic and political influences, resulting in lower predictability, despite its extensive global knowledge of the sector.
Same as other foreign banks operating in Brazil, Rabobank figures do not incorporate some of the operations originated in Brazil. A part of these are booked in other institutions of the group abroad, mainly those relative to foreign trade financing.
Rabobank presented lower results in local balance sheet in the first quarter of 2011 (1Q'11), due to increased provision expenses. Even though, management results, which accumulate operations from other group companies abroad, originated in Brazil and follow the international financial reporting standards (IFRS) remain satisfactory and above the goals set by the parent.
Rabobank has full access to markets, benefited by the good reputation of its parent, which provides it with ample credit lines, maintaining adequate control policies. The bank's treasury is conservative, with low limits and permanent monitoring by the parent.
In Brazil since 1989, Rabobank is a wholly owned subsidiary of RBG, one of the world's largest banking groups. Headquartered in Sao Paulo, Rabobank has 15 branches in Brazil and is specialized in livestock and food sectors.
Additional information available at 'www.fitchratings.com' or 'www.fitchratings.com.br'.
Applicable Criteria and Related Research:
--'National Ratings Criteria' (Jan. 19, 2011);
--'Short-Term Ratings Criteria for Corporate Finance' (Nov. 2, 2010);
--'Global Financial Institutions Rating Criteria' (Aug. 16, 2010).
Applicable Criteria and Related Research:
Short-Term Ratings Criteria for Corporate Finance
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=568726
Global Financial Institutions Rating Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=547685
National Ratings Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=595885
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Contacts:
Fitch Ratings
Primary Analyst
Paulo Fugulin, +55-11 4504-2600
Senior
Analyst
Fitch Ratings Brasil Ltda.
Rua Bela Cintra, 904 - 4th
floor, Sao Paulo -SP
or
Secondary Analyst
Jean Lopes,
+55-21 4503-2600
Senior Analyst
or
Committee Chairperson
Peter
Shaw, +1-212-908-0553
Managing Director
or
Media
Relations:
Jaqueline Carvalho, +55 21 4503 2623, Rio de Janeiro
Email:
jaqueline.carvalho@fitchratings.com
or
Cindy
Stoller, +1-212-908-0526, New York
Email: cindy.stoller@fitchratings.com
