Banco Indusval : S&P realiza várias ações de rating em instituições financeiras brasileiras

8d982272-0fe6-4844-acd7-93c30a5604c5.pdf

Various Rating Actions Taken On 40 Brazilian Banks On Rising Economic Risks

Primary Credit Analysts:

Jose M Perez-Gorozpe, Mexico City (52) 55-5081-4442; jose.perez-gorozpe@standardandpoors.com Lisa M Schineller, PhD, New York (1) 212-438-7352; lisa.schineller@standardandpoors.com

Sergio A Garibian, Sao Paulo (54) 114-891-2119; sergio.garibian@standardandpoors.com

Secondary Contacts:

Edgard Dias, Sao Paulo +55 (11) 30399771; edgard.dias@standardandpoors.com

Cynthia Cohen Freue, Buenos Aires 5411 48912161; cynthia.cohenfreue@standardandpoors.com Guilherme Machado, Sao Paulo (55) 11-3039-9754; guilherme.machado@standardandpoors.com Rafael Janequine, Sao Paulo +551130399786; rafael.janequine@standardandpoors.com

• We're revising Brazil's Banking Industry Country Risk Assessment (BICRA) to group '6' from group '5'. We're also revising the anchor for banks operating only in Brazil to 'bb+' from 'bbb-'.

• We now expect a more prolonged adjustment process--a slower correction in fiscal policy and another year of steep economic contraction. Consequently, we now expect that the ongoing correction phase will take a high toll on Brazil's financial system. Therefore, we're revising our economic risk score to '7' from '6' as a result of higher economic risks for the banking sector.

• In our view, these conditions also contribute to a higher credit risk in the economy. The expected continuation of economic contraction in 2016, high inflation, rising interest rates, and tighter credit conditions will weaken the corporate sector, which would be reflected in higher nonperforming loans and credit losses. Furthermore, we expect these conditions will weigh on Brazil's already highly indebted households as unemployment rises.

• We view the banking economic and industry risk trends as negative.

• As a result, we're taking various rating actions on 40 banks.

SAO PAULO (Standard & Poor's) March 14, 2016--Standard & Poor's Ratings Services lowered its global scale ratings on seven Brazilian banks and its national scale ratings on 13 banks after revising Brazil's BICRA to group '6'

from group '5' and the anchor, the starting point to rate banks, to 'bb+' from 'bbb-'. In addition, we affirmed the ratings on 25 banks. At the same time, we maintain two entities on CreditWatch negative on the weaker BICRA score. In addition, we revised our economic risk score to '7' from '6'. The banking economic and industry risk trends are negative.

We expect a more prolonged adjustment process in Brazil--a slower correction in fiscal policy as well as another year of steep economic contraction. As we had expected, domestic banks are now going through a correction phase, and both credit origination and house prices are dropping in real terms. We now expect the correction phase to dampen banks' creditworthiness as stagnation is likely to continue in 2016. Consequently, we revised our BICRA score on Brazil (foreign currency: BB/Negative/B; local currency: BB/Negative/B) to group '6' from group '5', which also resulted in reduction in Brazil's anchor to 'bb+', from 'bbb-'. Our bank criteria uses our BICRA economic risk and industry risk scores to determine a bank's anchor, the starting point in assigning an issuer credit rating. A BICRA is scored on a scale from '1' to '10', ranging from the lowest-risk banking systems (group '1') to the highest-risk (group '10'). The multiple rating actions on Brazil's banks reflect the lower anchor, higher economic risk, and risk-weighted assets (RWAs) and their potential effect on banks' asset quality metrics, risk-adjusted capital (RAC) ratios, and capital and earnings scores.

Brazil's economic risk reflects the country's low GDP per capita levels and political and economic challenges in the country, which remain considerable. In our view, credit risks in the economy have increased. We believe that Brazil's challenging economic conditions, high inflation, rising interest rates, and tighter credit conditions will weaken the corporate sector, which would be reflected in higher non-performing loans and credit losses.

Furthermore, we expect these conditions will place a higher burden on Brazil's already highly indebted households as unemployment rises. We expect the banking sector's asset quality will continue deteriorating amid rising credit losses. In addition, we continue to believe mid-size and small banks, which focus on lending to small and medium enterprises and have higher exposure to cyclical sectors, will suffer significant credit losses, which could lead to a downward revision of our capital and earnings and risk position assessments on these banks. On the other hand, although we don't expect large bank failures at this point, we believe that their bottom-line results will deteriorate over the next 18 months.

Our industry risk assessment for Brazil reflects the large presence of government-owned banks in the financial system, which has caused significant distortions over the past few years, weakening competitive dynamics. However, the pressure on banks' margins has eased over the past few months as reference rates have increased sharply. Domestic financial regulation has been improving thanks to its extensive coverage and alignment with international standards.

The Brazilian banking system also has an adequate funding mix with a stable core customer deposit base and satisfactory access to domestic and international capital markets. In addition, banks' dependency on external funding is fairly low, accounting for 9.2% of the system's total liabilities

in the past two years.

ECONOMIC AND INDUSTRY RISKS

Due to a one-in-three chance that our economic risk assessment on Brazil's banking sector will worsen, we assess the trend as negative. In our view, economic conditions remain extremely challenging. If Brazil fails to come out of recession in 2017, which would widen losses in the sector and compromise the larger banks' fundamentals, we could reassess the impact of the correction phase and revise our BICRA further downward. We could also reassess our assessment of credit risk in the economy if contagion from corruption investigation at Petroleo Brasileiro S.A. - Petrobras spreads to the larger banks.

We view the banking sector's industry risk trend as negative. In our view, there is at least a one-in-three chance that stagnant economy will weaken the banking system-wide funding by reducing banks' available liquidity and access to the credit markets. On the other hand, we believe that increasing interest rates and the public banks' slower lending growth will somewhat benefit the private banks' performance by allowing them to stabilize their margins and regain some market share, although we expect this will take some years to occur, given Brazil's currently sluggish economy. We view recent developments in Brazil's regulatory framework as positive, although we believe that the benefits of and effective implementation of liquidity regulation and the full adoption of Basel III rules will still take some years to materialize. We don't expect additional risks arising from institutional framework for the next few years.

OUTLOOK

The negative outlook attributed to banks impacted by the BICRA downgrade stems from the negative trends in both industry and economic risk on Brazil's BICRA and from further potential downgrades of the country's anchor and pressure on RAC and capital and earnings scores given higher RWAs. The negative outlook of banks with a 'BB' issuer credit rating reflects the outlook on the sovereign because we expect these ratings to move in tandem.

UPWARD SCENARIO

We could revise the outlook on banks to stable if we revise our trend on economic and industry risk to stable, and our forecasted RAC for the next two years doesn't result in changes in their capital and earnings scores. We could revise the outlooks on banks with a 'BB' issuer credit rating, which are capped by the sovereign, to stable following a similar action on the sovereign.

DOWNWARD SCENARIO

We could downgrade banks by multiple notches if we were to downgrade BICRA further because we evaluate its potential impact on anchor, RWAs, and capital and earnings scores. We could downgrade banks with a 'BB' issuer credit rating, which are capped by the sovereign, following a similar action on the sovereign.

CRITERIA AND RESEARCH

• Banking Industry Country Risk Assessment Update: February 2016

• Standard & Poor's National And Regional Scale Mapping Tables, Jan. 19, 2016

• Rating Government-Related Entities: Methodology And Assumptions, March 25, 2015

• Bank Hybrid Capital And Nondeferrable Subordinated Debt Methodology And Assumptions, Jan. 29, 2015

• Nonbank Financial Institutions Rating Methodology, Dec. 9, 2014

• Methodology For Applying Recovery Ratings To National Scale Issue Ratings, Sept. 22, 2014

• Ratings Above the Sovereign - Corporate and Government Ratings: Methodology and Assumptions, Nov. 19, 2013

• Group Rating Methodology, Nov. 19, 2013

• Banks: Quantitative Metrics For Rating Banks Globally: Methodology And Assumptions, July 17, 2013

• Banks: Rating Methodology And Assumptions, Nov. 9, 2011

• Banking Industry Country Risk Assessment Methodology And Assumptions, Nov. 9, 2011

• Bank Capital Methodology and Assumptions, Dec. 6, 2010

• Use Of CreditWatch And Outlooks, Sept. 14, 2009

RATINGS LIST

Ratings Affirmed

Caixa Economica Federal Local Currency

Global scale rating

BB/Negative/B

Foreign Currency Global scale rating

BB/Negative/B Brazil national scale

brAA-/Negative/brA-1

Senior Unsecured

BB

Banco Nacional de Desenvolvimento Economico e Social Local Currency

Global scale rating

BB/Negative/--

Foreign Currency Global scale rating

BB/Negative/--

Brazil national scale

brAA-/Negative/--

Senior Unsecured

BB

BNDESPar-BNDES Participacoes S.A.

Brazil national scale

brAA-/Negative/--

Senior Unsecured

brAA-

Banco Safra S.A. Global scale rating

BB/Negative/B Brazil national scale

brAA-/Negative/brA-1 Senior Unsecured

BB

Banco Bradesco S.A. Global scale rating

BB/Negative/B Brazil national scale

brAA-/Negative/brA-1

Senior Unsecured

BB

Bradesco Capitalizacao S.A.

Brazil national scale

brAA-/Negative/--

Banco Citibank S.A. Global scale rating

BB/Negative/B Brazil national scale

brAA-/Negative/brA-1

Itau Unibanco Holding S.A. Global scale rating

BB/Negative/B Brazil national scale

brAA-/Negative/brA-1

Senior Unsecured

BB

Itau Unibanco S.A. Global scale rating

BB/Negative/B Brazil national scale

brAA-/Negative/brA-1

Banco Toyota do Brasil S.A.

Brazil national scale

brAA-/Negative/--

Banco BNP Paribas Brasil S.A.

Brazil national scale

brAA-/Negative/--

Banco Volkswagen S.A.

Brazil national scale

brAA-/Negative/--

Banco de Tokyo-Mitsubishi UFJ Brasil S.A.

Brazil national scale

brAA-/Negative/brA-1

Banco Morgan Stanley S.A.

Brazil national scale

brAA-/Negative/brA-1

Banco Santander (Brasil) S.A. Global scale rating

BB/Negative/B Brazil national scale

brAA-/Negative/brA-1

Senior Unsecured

BB

Subordinated

B

Junior Subordinated

CCC+

Banco Bonsucesso Consignado S.A.

Brazil national scale

brAA-/Negative/brA-1

Banco do Nordeste do Brasil S.A. Global scale rating

BB/Negative/B/--

Brazil national scale

brAA-/Negative/-- Senior Unsecured

BB

Banco do Brasil S.A Global scale rating Local currency

BB/Negative/-- Foreign currency

BB/Negative/B Senior Unsecured

BB

Subordinated

B

Junior Subordinated

B-

Ativos S.A. Securitizadora de Creditos Financeiros Brazil national scale

brAA-/Negative/--

Banco de Desenvolvimento de Minas Gerais S.A. - BDMG Global scale rating

BB-/Negative/--

Brazil national scale

brA/Negative/--

Senior Unsecured

brA

Banco ABC Brasil S.A. Global scale rating

BB/Negative/B Brazil national scale

brAA-/Negative/brA-1 Senior Unsecured

BB

Banco Fibra S.A. Global scale rating

B-/Negative/C Brazil national scale

brB-/Negative/brC

Haitong Banco de Investimento do Brasil S.A. Global scale rating

BB-/Positive/B Brazil national scale

brA+/Positive/brA-2 Ratings Affirmed; Outlook Action

To From

Banco Intermedium S.A.

Brazil national scale

brBBB-/Negative/-- brBBB-/Watch Neg

BRB - Banco de Brasilia S.A. Global scale rating

BB-/Negative/B BB-/Watch Neg/B Brazil national scale

brA-/Negative/brA-2 brA-/Watch Neg/brA-2

Banco Votorantim S.A. Global scale rating

BB/Negative/B BB/Watch Neg/B Senior Unsecured

BB BB/Watch Neg

Banco do Estado do Rio Grande do Sul S.A. Global scale rating

BB/Negative/-- BB/Watch Neg/--

Banco Mercantil Do Brasil S.A. Global scale rating

B-/Negative/C B-/Watch Neg/C

Ratings Lowered

Banco Daycoval S.A. Global scale rating

BB-/Negative/B BB/Watch Neg/B Brazil national scale

brA/Negative/brA-2 brAA-/Watch Neg/brA-1 Senior Unsecured

BB- BB/Watch Neg

Parana Banco S.A Global scale rating

BB-/Negative/B BB/Watch Neg/B Brazil national scale

brA/Negative/-- brAA-/Watch Neg/--

Banco do Estado do Para S.A. Global scale rating

BB-/Negative/B BB/Watch Neg/B Brazil national scale

brA/Negative/brA-2 brA+/Watch Neg/brA-1

Banco Pine S.A. Global scale rating

BB-/Negative/B BB/Watch Neg/B Brazil national scale

brA-/Negative/-- brA+/Watch Neg/--

Senior Unsecured

brA- brA+/Watch Neg

China Construction Bank (Brasil) Banco Multiplo S.A. Global scale rating

BB-/Watch Neg/B BB/Watch Neg/B Brazil national scale

brA-/Watch Neg/-- brA+/Watch Neg/--

Banco Pan S.A. Global scale rating

B+/Watch Neg/B BB-/Watch Neg/B Brazil national scale

brBBB-/Watch Neg/brA-3 brA-/Watch Neg/brA-2 Junior Subordinated

CCC/Watch Neg CCC+/Watch Neg

Banco Indusval & Partners S.A. Global scale rating

B/Negative/B B+/Watch Neg/B Brazil national scale

brBB-/Negative/brB brBBB-/Watch Neg/brA-3 National Scale Ratings Lowered

Banco Votorantim S.A.

Brazil national scale

brA+/Negative/brA-1 brAA-/Watch Neg/brA-1

Votorantim Financas S.A.

Brazil national scale

brA+/Negative/brA-1 brAA-/Watch Neg/brA-1

BV Leasing Arrendamento Mercantil S.A.

Subordinated brA- brA/Watch Neg

Banrisul - Banco do Estado do Rio Grande do Sul S.A.

Brazil national scale

brA+/Negative/-- brAA-/Watch Neg/--

Banco Mercantil Do Brasil S.A.

Brazil national scale

brB/Negative/-- brB+/Watch Neg/--

Caruana S.A. - Sociedade de Credito, Financiamento e InvestimentoBrazil national scale

brBB/Negative/brB brBB+/Watch Neg/brB Ratings Still On CreditWatch Negative

Banco BTG Pactual S.A. Global scale rating

B+/Watch Neg/B Brazil national scale

brBBB-/Watch Neg/brA-3 HSBC Bank Brasil S.A.

Global scale rating

BB/Watch Neg/B Senior Unsecured

BB/Watch Neg

Certain terms used in this report, particularly certain adjectives used to express our view on rating relevant factors, have specific meanings ascribed to them in our criteria, and should therefore be read in conjunction with such criteria. Please see Ratings Criteria at www.standardandpoors.com for further information. Complete ratings information is available to subscribers of RatingsDirect at www.globalcreditportal.com and at spcapitaliq.com. All ratings referenced herein can be found on Standard & Poor's public Web site at www.standardandpoors.com. Use the Ratings search box located in the left column.

Copyright © 2016 Standard & Poor's Financial Services LLC, a part of McGraw Hill Financial. All rights reserved.

No content (including ratings, credit-related analyses and data, valuations, model, software or other application or output therefrom) or any part thereof (Content) may be modified, reverse engineered, reproduced or distributed in any form by any means, or stored in a database or retrieval system, without the prior written permission of Standard & Poor's Financial Services LLC or its affiliates (collectively, S&P). The Content shall not be used for any unlawful or unauthorized purposes. S&P and any third-party providers, as well as their directors, officers, shareholders, employees or agents (collectively S&P Parties) do not guarantee the accuracy, completeness, timeliness or availability of the Content. S&P Parties are not responsible for any errors or omissions (negligent or otherwise), regardless of the cause, for the results obtained from the use of the Content, or for the security or maintenance of any data input by the user. The Content is provided on an "as is" basis. S&P PARTIES DISCLAIM ANY AND ALL EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE, FREEDOM FROM BUGS, SOFTWARE ERRORS OR DEFECTS, THAT THE CONTENT'S FUNCTIONING WILL BE UNINTERRUPTED, OR THAT THE CONTENT WILL OPERATE WITH ANY SOFTWARE OR HARDWARE CONFIGURATION. In no

event shall S&P Parties be liable to any party for any direct, indirect, incidental, exemplary, compensatory, punitive, special or consequential damages, costs, expenses, legal fees, or losses (including, without limitation, lost income or lost profits and opportunity costs or losses caused by negligence) in connection with any use of the Content even if advised of the possibility of such damages.

Credit-related and other analyses, including ratings, and statements in the Content are statements of opinion as of the date they are expressed and not statements of fact. S&P's opinions, analyses, and rating acknowledgment decisions (described below) are not recommendations to purchase, hold, or sell any securities or to make any investment decisions, and do not address the suitability of any security. S&P assumes no obligation to update the Content following publication in any form or format. The Content should not be relied on and is not a substitute for the skill, judgment and experience of the user, its management, employees, advisors and/or clients when making investment and other business decisions. S&P does not act as a fiduciary or an investment advisor except where registered as such. While S&P has obtained information from sources it believes to be reliable, S&P does not perform an audit and undertakes no duty of due diligence or independent verification of any information it receives.

To the extent that regulatory authorities allow a rating agency to acknowledge in one jurisdiction a rating issued in another jurisdiction for certain regulatory purposes, S&P reserves the right to assign, withdraw, or suspend such acknowledgement at any time and in its sole discretion. S&P Parties disclaim any duty whatsoever arising out of the assignment, withdrawal, or suspension of an acknowledgment as well as any liability for any damage alleged to have been suffered on account thereof.

S&P keeps certain activities of its business units separate from each other in order to preserve the independence and objectivity of their respective activities. As a result, certain business units of S&P may have information that is not available to other S&P business units. S&P has established policies and procedures to maintain the confidentiality of certain nonpublic information received in connection with each analytical process.

S&P may receive compensation for its ratings and certain analyses, normally from issuers or underwriters of securities or from obligors. S&P reserves the right to disseminate its opinions and analyses. S&P's public ratings and analyses are made available on its Web sites, www.standardandpoors.com (free of charge), and www.ratingsdirect.com and www.globalcreditportal.com (subscription) and www.spcapitaliq.com (subscription) and may be distributed through other means, including via S&P publications and third-party redistributors. Additional information about our ratings fees is available at www.standardandpoors.com/usratingsfees.