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Rating Action:

Moody's takes rating actions on 12 Brazilian banks and assigns CR assessments

 The document has been translated in other languages

12 Jun 2015

New York, June 12, 2015 -- Moody's Investors Service has today affirmed all debt and deposit ratings in the global and national scales, and baseline credit assessments (BCAs) of six Brazilian banks, namely Banco Safra S.A. (Safra), Banco ABC Brasil S.A. (BAB), Banco do Estado do Rio Grande do Sul S.A. (Banrisul), Banco Pine S.A. (Pine), Banco Bonsucesso S.A. (Bonsucesso), and Banco BMG S.A (BMG). The ratings outlook for Safra and Pine is negative, and the ratings outlook for BAB, Banrisul, Pine, Bonsucesso and BMG is stable.

Moody's has also affirmed the debt and deposit ratings in the global scale, and BCAs of Banco BTG Pactual S.A., Banco Pan S.A., and Banco Fibra S.A., but changed the ratings outlook to negative, from stable. At the same time, Moody's downgraded the national scale ratings of Banco BTG Pactual S.A. and Banco Fibra S.A..

In addition, Moody's affirmed the deposit ratings of Banco Citibank S.A. and the deposit and debt ratings of Banco Industrial e Comercial S.A. , and lowered their respective BCAs.

Moody's downgraded the deposit ratings in the global and national scales and the senior unsecured and subordinated debt ratings of Banco Mercantil do Brasil S.A.. In Addition, Moody's also lowered the bank's BCA. The outlook on ratings remained negative.

At the same time, Moody's assigned a counterparty risk (CR) assessment to these banks, prompted by the publication of its new Banks methodology (see "Banks" published on 16 March 2015).

The 12 Brazilian banks covered in this press release are:

- Banco Safra S.A.

- Banco ABC Brasil S.A.

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

- Banco Bonsucesso S.A.

- Banco BMGS.A.

- Banco Pine S.A.

- Banco BTG Pactual S.A.

- Banco Pan S.A.

- Banco Fibra S.A.

- Banco Industrial e Comercial S.A.

- Banco Citibank S.A

- Banco Mercantil do Brasil S.A.

Moody's has withdrawn the outlooks on all junior instrument ratings for its own business reasons. Please refer to Moody's Investors Service's Policy for Withdrawal of Credit Ratings, available on its website, www.moodys.com. Outlooks are now only assigned to long-term senior debt and deposit ratings, indicating the direction of any rating pressures.

Please click on the following link to access the full list of affected credit ratings. This list is an integral part of this press release and identifies each affected issuer: http://www.moodys.com/viewresearchdoc.aspx?docid=PBC_182341.

Please click this link for Moody's new Banks methodology:

http://www.moodys.com/viewresearchdoc.aspx?docid=PR_320662.

RATINGS RATIONALE

SPECIFIC ANALYTICAL FACTORS RELATED TO THE 12 BRAZILIAN BANKS

AFFIRMATION OF BANKS' BCAs

BANCO SAFRA (SAFRA)

The affirmation of Safra's baa2 BCA reflects its well-established franchise as a lender to large and upper mid-sized companies as well as its steady financial policies, which are supported by conservative risk management. The bank reports adequate asset quality indicators and consistent profitability through the economic cycles, indicative of a robust liquidity position and financial flexibility due to Safra's predominantly short-term secured loan book and its access to diversified and steady customer deposits. Safra's Tangible Common Equity (TCE) was 9.0% of risk-weighted assets as of December 2014, a low score relative to global peers as per Moody's new methodology. However, the bank's consistent recurring earnings and the commitment from controlling shareholders have proven adequate for sustaining the bank's strategy over time.

Moody's also affirmed Safra's Baa2 deposit, senior unsecured and Baa3 subordinated debt ratings, and maintains the negative outlook on these ratings, which is in line with the negative outlook on Brazil's Baa2 sovereign bond rating. The Aaa.br and BR-1 Brazilian national scale deposit ratings, for long and short-term respectively, were also affirmed.

WHAT COULD CHANGE THE RATINGS

We do not expect upward pressures on the ratings at this juncture. Conversely, downward pressure on Safra's ratings could derive from the downgrade of the sovereign bond rating or from an aggressive expansion of the bank's business at the expense of its capital and asset quality. The extent and quality of Safra's lending operation will also be considered in assessing the future evolution of the bank's standalone financial strength.

BANCO ABC BRASIL (BAB)

Moody's affirmed BAB's BCA at baa3, an indication of the consistent financial performance that derives from the bank's traditional lending operation to corporates and SMEs. The bank's credit risk control is disciplined, with high degree of collateralization, leading to the non-performing loan ratios that are consistently low as compared to local peers. Conversely, the bank's intrinsically wholesale funding mix is a negative credit driver for the BCA, together with a capital score of ba2. However, the bank has a diversified funding mix and a loan portfolio that is short term in nature, which mitigates sensitivity to the confidence of institutional investors. By Moody's global measures, capitalization is low at 9%, but BAB's conservative growth strategy reduces capital pressure for the coming quarters.

Moody's also affirmed BAB's Baa3 supported deposit and senior debt ratings that map directly from its baa3 BCA. Although we acknowledge the high likelihood of support that could be provided by its parent, Arab Banking Corporation (ABC, Ba1 positive, ba2 BCA), if necessary, BAB ratings are currently higher than its parent's. The Ba1 subordinated debt rating and Brazilian national scale deposit ratings of Aa1.br for long-term and BR-1 for short-term were also affirmed. All ratings have stable outlook.

WHAT COULD CHANGE THE RATINGS

Upward pressure on the standalone BCA of baa3 could be triggered by the delivery of significant and sustainable improvement in profitability relative to peers. On the other hand, the rating could be negatively affected if the bank's liquidity or access to funding is impacted by instability at the parent bank's level that could compromise the sustainability of its business mode. In addition, material deterioration in the bank's credit fundamentals and/or a changed risk profile could have negative rating implications, particularly if increasing competitive conditions affect the pricing of risk of certain asset classes. Failure to maintain capital adequacy at comfortable levels could also put pressure on the ratings.

BANCO DO ESTADO DO RIO GRANDE DO SUL (BANRISUL)

In affirming Banrisul's baa3 BCA, Moody's acknowledges the bank's established retail-banking franchise with an ample footprint in core deposits and loans within the state of Rio Grande do Sul; this business supports the bank's low funding cost, stable liquidity structure, and steady internal capital generation. Banrisul's asset risk profile incorporates risks related to geographic concentration and the poor performance of its SME loan book, which accounted for 27.5% of total loans in March 2015; the SME loan book has been strongly affected by the weak economic activity. The bank's performance has been impacted by high expansion costs and lower loan origination, but efforts to enhance its fee-based business will improve profitability in the coming years, as the bank restructures to reinforce efficiencies in its insurance and credit card operations.

Although in Moody's view, Banrisul would be eligible to receive support from its local regional government, the State of Rio Grande do Sul (unrated), its supported global local currency deposit rating do not incorporate any government support uplift, and the Baa3 is a direct mapping of the BCA. The local and foreign currency deposit as well as the subordinated debt ratings and the Brazilian national scale ratings assigned to Banrisul were also affirmed. All ratings have a stable outlook.

WHAT COULD CHANGE THE RATINGS

Upward pressures could come from the bank's proven ability to withstand rising competition while sustaining its profitability and capital ratios, as well as asset quality standards. Success in expanding operations outside the state of Rio Grande do Sul could also be positive for profitability and for ratings. Conversely, negative pressure on ratings could arise from deterioration in profitability due to increasing competition in its core market as well as an inability to expand operations beyond the state's borders. Potential weakening of agricultural activity in the region could also drive profits down, given Banrisul's large exposure to the segment.

BANCO PINE (PINE)

Moody's affirmed the BCA of ba3 assigned to Pine, which reflects profitability that remains challenged by lower business volumes and high credit costs as the bank adjusts its reserves in face of its large exposures to economic sectors highly vulnerable to the currently weak economic conditions. The limited earnings generation is counter-balanced by adequate capitalization, although the bank's ability to replenish capital has been reduced over recent quarters. All other ratings, including the Ba3 global local and foreign currency deposits ratings, as well as the foreign currency senior unsecured debt and subordinated debt ratings of Ba3 and B1 respectively, were affirmed. The A3.br and BR-2 long- and short-term Brazilian national scale ratings were also affirmed. The outlook on these ratings remained negative as announced on 10 April 2015.

WHAT COULD CHANGE THE RATINGS

At this juncture, Moody's anticipates limited upward pressure on Pine's ratings given the negative outlook on them. Conversely, Moody's notes that the ratings could face downward pressure if potential loan losses from single large borrower defaults hurt the bank's capital position. Profitability could be affected by the creation of additional provisions to absorb losses, which would also be negative to ratings. The weak economic environment also has negative pressure on profitability, as it reduces the bank's ability to generate recurring earnings.

BANCO BMG (BMG)

The affirmation of BMG's b1 BCA reflects important challenges primarily to asset quality fundamentals, future profitability and the ability to replenish capital. Following the sale of its core business platform to Banco Itau BMG Consignado S.A. (unrated), in exchange of a 40% share stake at this joint-venture with Itau Unibanco S.A. (Baa2 negative, baa2 BCA), BMG faces the task of repositioning its franchise amidst the weak economic activity, despite early signs of improving operating efficiency.

At this point, Moody's affirmed all ratings assigned to BMG including the global long- and short-term local and foreign currency deposit ratings of B1 and Not Prime, respectively; the B1 senior unsecured debt and B2 subordinated debt ratings, as well as the Brazilian national scale deposit ratings of Baa3.br and BR-3, long- and short-term, respectively. At the same time, Moody's affirmed the subordinated debt rating of B2 assigned to a 2016 Tier 2 notes issued by Banco de Crédito e Varejo S.A. (former-Banco Schahin), and backed by BMG. All ratings have a stable outlook.

WHAT COULD CHANGE THE RATINGS

Positive pressure on BMG's ratings could develop if the bank proves capacity to sustain profitability as it repositions the franchise, thus generating capital organically to support business expansion. Further material reduction of the risks posed by the bank's overall restructuring could also lead to higher BCA. Moody's does not see any negative pressures on the rating at the moment.

BANCO BONSUCESSO (BONSUCESSO)

The affirmation of Bonsucesso's BCA at b2 reflects the evolving process of franchise repositioning and risks associated with a changing business model in times of weak economic activity and high credit risk. This follows the sale of its core portfolio to a joint venture (JV) created with Banco Santander (Brasil) S.A. (Baa2 negative, baa2 BCA) that will focus on originating payroll loans and payroll credit cards. Although the bank's capitalization is high, recent exposures to SME lending have had a negative impact on asset quality, which has been slightly improving in recent quarters. However, recurring earnings generation remains poor, which constrains Bonsucesso's financial profile. All other ratings assigned to Bonsucesso were also affirmed, including the B2 local and foreign currency deposit, and the foreign currency subordinated debt rating of B3. Moody's also affirmed the bank's Ba1.br and BR-4 long- and short-term Brazilian national scale ratings. The ratings have a stable outlook.

WHAT COULD CHANGE THE RATINGS

Positive pressure on Bonsucesso's ratings could result from consistent improvement in the bank's core profitability. The transfer of the payroll business to the JV leads to a bank with a leaner structure and good capitalization and liquidity, but it also decreases its ability to originate revenues. On the other hand, ratings could be affected negatively by transition risks associated with changing the bank's focus towards a more competitive market. Bonsucesso needs to develop business lines during a period of slow economic activity, which could hurt margins and asset quality.

BCAs OF TWO BANKS LOWERED

BANCO CITIBANK (CITI BRAZIL)

The downgrade of Citi Brazil's BCA to baa3, from baa2, reflects the bank's lower capitalization. We note, however, that Citibank's capitalization remains at strong levels, with TCE to risk weighted assets (RWA) of 11.4% in December 2014. The bank's BCA is also supported by sound asset risk, given favorable historical performance in its target market and high reserve coverage. Increased non-recurring provisions and lower trading gains negatively impacted profitability in FY14. Citi Brazil has historically maintained a large volume of liquid resources while it also relies on a stable deposit base that is largely supported by corporate banking, retail and private banking customers.

At the same time, Moody's affirmed Citi Brazil's Baa2 deposit rating, which incorporates a one-notch uplift from its baa3 BCA based on our assessment of a moderate likelihood of support from its parent, Citibank N.A (A1 stable, baa2 BCA), given its full ownership, same brand name and business integration. The negative outlook on its ratings follow the negative outlook on the sovereign.

WHAT COULD CHANGE THE RATINGS

There is limited upward pressure on Citibank's BCA. Improvement in its profitability and a higher capitalization would be positive. Downward pressures on BCA are related to lowering profitability, and asset risk deterioration. At the same time, Citi-Brazil's deposit rating is unlikely to be upgraded because it is positioned at the same level as the sovereign rating, which carries a negative outlook. The main downward pressure on Citi-Brazil's deposit rating would come from a downgrade in the sovereign rating.

BANCO INDUSTRIAL E COMERCIAL (BICBANCO)

The lowering of BICBANCO's BCA to ba3 from ba2, reflects the ongoing net losses it has reported over the last four quarters and the challenges to turning around performance given that asset risk continues deteriorating further, as the meaningful increase in non-performing loans in early 2015 indicates. Consequently, the bank's TCE to RWA ratio fell to 5.6% in 1Q15. BICBANCO will continue to face adversity as it looks to improve its financial metrics, because the shrinking balance sheet directly affects its revenue generation and loan loss provisions are increasing. However, we note that the improved cost of funds following the change in ownership is not fully reflected in its net interest margin. At the same time, a strong level of liquid assets supports the bank's financial profile, as does the enhanced market access provided by its shareholder, China Construction Bank (CCB, A1 stable, baa2 BCA).

Moody's also affirmed BICBANCO's Baa3 deposit and senior debt ratings, which benefit from a three-notch uplift from the ba3 BCA. Moody's assesses a very high likelihood of support from its parent CCB, based on it owning a majority stake and the strategic position of the subsidiary given the important trade linkages between Brazil and China. The ratings remain on stable outlook.

WHAT COULD CHANGE THE RATINGS

Upward pressures on BICBANCO's BCA would be related to a clear improvement on asset risk supported by strong enhancement of credit risk standards and significant reduction in problem loans, consistent improvement in its profitability, and increased capitalization. Downward pressures on BCA would be driven by asset risk deterioration, inability to achieve profitability breakeven, and further capital deterioration. Also, an upward/downward pressure on BICBANCO's deposit and debt ratings would be mainly driven by a downgrade/upgrade on CCB's baa2 BCA.

BANCO BTG PACTUAL, BANCO PAN AND BANCO FIBRA: RATINGS' OUTLOOK CHANGED TO NEGATIVE FROM STABLE

BANCO BTG PACTUAL (BTG)

Moody's affirmed BTG's baa3 BCA, which is supported by strong profitability and appropriate liquidity while negatively pressured by asset risk and declining capitalization. BTG has sustained high profitability levels, despite the adverse conditions in its target markets. In terms of liquidity, the bank is intrinsically dependent on market funds, a risk that is mitigated, however, by a large amount of liquid resources. Asset risk is affected by the large market risk position carried on its balance sheet and by the large amount of non-lending credit risk, notably derived from merchant banking investments. We note, however, the adequate track record in market risk, and the favorable performance of its investments outside the financial services business.

The Baa3 deposit and senior unsecured debt ratings were also affirmed, in line with the baa3 BCA. Moody's changed the outlook on the ratings to negative, from stable, reflecting the declining capital position mainly from the accelerated growth on risk weighted assets. The negative outlook also factors in the risks associated with the bank's ability to keep generating results that support internal capital generation, in an environment with meaningful challenges. We also take into account the expected increase in capital consumption from the upcoming incorporation of BSI, although any capital consumption is likely to be partially offset by BSI's stronger asset risk profile. At the same time, we note that a large portion of BTG's capital requirement derives from market risk, and therefore, offers management the alternative to reduce risk taking, and ultimately improve capitalization. Also, the recent extraordinary gains from Rede D'or are expected to enhance its capital position.

Moody's also downgraded the long-term Brazilian national scale deposit rating to Aa1.br from Aaa.br, and affirmed the short-term Brazilian national scale deposit rating of BR-1.

WHAT COULD CHANGE THE RATINGS

Upward ratings pressure could come from capital ratio enhancement, and lower dependence on market funds.

BANCO PAN (PAN)

Moody's affirmed Pan's b1 BCA, which is supported by improving asset risk and liquidity, while negatively weighted by poor profitability and low capitalization. The increased origination of low-risk loans under tight underwriting policies is leading to a sustained improvement in asset risk, although the delinquency ratio is still hurt by limited product diversification and a lower quality legacy portfolio. Moody's recognizes that its loan risk profile is vulnerable to the currently weak economy, notably conditions in the labor market. Under Moody's approach, which excludes intangibles and a meaningful amount of deferred tax assets, capitalization is low, with the ratio of TCE to RWA at 5.7%. At the same time, we note that Pan displays strong liquidity resources, which are backed by sizeable funding commitments from its shareholders Caixa Economica Federal (Baa2 negative, ba2 BCA) and Banco BTG Pactual (Baa3 negative, baa3 BCA), which also favor the term structure of its funding.

The Ba2 deposit and senior unsecured debt ratings assigned to Pan were also affirmed. The supported ratings benefit from two notches of uplift from the b1 BCA, incorporating Moody's assessment of a high likelihood of support from its controlling shareholders BTG Pactual and Caixa. Moody's changed the outlook on its ratings to negative, from stable, following the change in the outlook of BTG Pactual's ratings to negative.

WHAT COULD CHANGE THE RATINGS

Upward pressures on Pan's BCA could come from consistent improvement on profitability, ongoing asset risk enhancement, and capital ratio stabilization. Downward pressures on BCA could come from asset risk deterioration, weakening capital position, and ongoing net losses.

Pan's deposit and debt ratings are unlikely to be upgraded because its shareholders' ratings currently have a negative outlook. A downward pressure on Pan's deposit and senior debt ratings could be prompted by a downgrade on its main shareholders' ratings.

BANCO FIBRA (FIBRA)

Moody's affirmed Banco Fibra's b1 BCA, which reflects the fact that asset risk continues to be hurt by the still-high amount of problem loans given the running off of legacy loans in consumer finance. Also, recurring net losses affect the bank's financial profile, as they lead to low capital levels being maintained. At the same time, strong liquid resources support the bank, and mitigate its intrinsic dependence on market funds.

The B1 deposit and senior unsecured debt ratings were also affirmed, in line with its BCA. The outlook on its ratings was changed to negative reflecting our expectation that the bank may take longer than expected to achieve positive results, as the unfavorable economic environment creates barriers to originating new assets with adequate risk profiles, while it also pressures the credit cost of the existing loan portfolio. In this context, we expect the bank to still depend on capital injections from its shareholder to maintain its capital ratios, which are already positioned at reduced levels, according to Moody's measurements.

Moody's also downgraded the long-term Brazilian national scale deposit rating to Baa2.br from Baa1.br, and affirmed the short-term Brazilian national scale deposit rating of BR-2.

DOWNGRADE OF BCA AND RATINGS

BANCO MERCANTIL DO BRASIL (BMB)

In lowering BMB's BCA to b2, from b1, Moody's notes the weakening performance over the past few quarters, in particular its low capitalization levels measured by Moody's ratio of TCE to RWA. The bank's recent results also continued to show high asset risk profile and weak profitability. The hike in the delinquency ratio reflects the poor quality of the bank's SME loan book, which has been highly vulnerable to the slow economic activity of the past years, resulting in increased credit costs that led to losses, hurting capitalization in 2014. The main positive drivers of the b2 BCA is BMB's regional retail footprint that supports its good core funding, which compares favorably relative to other b-rated banks in Brazil. All ratings remain on negative outlook to reflect the pressures of challenging market conditions and slow business activity. On the same date, Moody's downgraded BMB's long-term global local and foreign currency deposit ratings to B2, from B1, the senior unsecured debt rating to B2, from B1, the subordinated debt rating to B3, from B2, and the Brazilian national scale deposit ratings to Ba2.br and BR-4, from Baa3.br and BR-3, in the long- and short-term, respectively. The short-term local and foreign currency deposit ratings were affirmed.

WHAT COULD CHANGE THE RATINGS

Moody's noted that all ratings have a negative outlook; therefore, a rating upgrade is highly unlikely to happen at this moment. However, ratings could go down as a result of additional reporting of high provision expenses and continuous reduction of capital cushion. Failure to improve the quality of the loan portfolio could also result in additional rating downgrade. Negative pressure on ratings could also derive from a prolonged inability to access low-cost funding, if it were to impact profitability metrics.

ASSIGNING COUNTERPARTY RISK ASSESSMENTS

As part of today's actions, Moody's has assigned a Counterparty Risk Assessment (CR Assessment) to 12 banks and their branches. CR Assessments are opinions of how counterparty obligations are likely to be treated if a bank fails, and are distinct from debt and deposit ratings in that they (1) consider only the risk of default rather than expected loss and (2) apply to counterparty obligations contractual commitments rather than debt or deposit instruments. The CR Assessment is an opinion of counterparty risk related to a bank's covered bonds, contractual performance obligations (servicing), derivatives (e.g. swaps), letters of credit, guarantees and liquidity facilities.

For these 12 Brazilian banks, the CR Assessments do not consider government support in line with our assumption on deposits and senior unsecured debt ratings. This reflects our view that operating activities and obligations reflected by the CR Assessments are unlikely to benefit from any support provision from resolution authorities to senior unsecured debt and deposits.

The assigned CR Assessments are one-notch above respective banks' Adjusted BCAs and therefore above the senior unsecured and deposit ratings, reflecting Moody's view that its probability of default is lower than that of senior unsecured debt and deposits. Moody's believe that senior obligations represented by the CR Assessment will be more likely preserved in order to limit contagion, minimize losses and avoid disruption of critical functions.

METHODOLOGY USED & LAST RATING ACTIONS

The principal methodology used in these ratings was Banks published in March 2015. Please see the Credit Policy page on ww.moodys.com for a copy of this methodology.

Moody's National Scale Credit Ratings (NSRs) are intended as relative measures of creditworthiness among debt issues and issuers within a country, enabling market participants to better differentiate relative risks. NSRs differ from Moody's global scale credit ratings in that they are not globally comparable with the full universe of Moody's rated entities, but only with NSRs for other rated debt issues and issuers within the same country. NSRs are designated by a ".nn" country modifier signifying the relevant country, as in ".za" for South Africa. For further information on Moody's approach to national scale credit ratings, please refer to Moody's Credit rating Methodology published in June 2014 entitled "Mapping Moody's National Scale Ratings to Global Scale Ratings".

LAST RATING ACTIONS

Moody's took its last rating action on Banco Safra S.A. (Safra) on 13 November 2014 when it assigned a Baa2 foreign currency senior unsecured debt rating to the CHF 100 million 2019 senior unsecured notes issued by Banco Safra S.A., Cayman Islands Branch. All other ratings remained unchanged. The outlook for the ratings is negative.

Moody's took its last rating action on Banco Citibank S.A. (Citi-Brazil) on 9 September 2014, when the rating agency changed to negative, from stable, the outlook on Citi-Brazil's long-term foreign currency deposit rating of Baa2. The short-term foreign currency deposit rating as well as the baseline credit assessment of baa2 remained unchanged. The action followed the change in outlook to negative, from stable, on Brazil's government bond ratings.

Moody's took its last rating action on Banco BTG Pactual S.A. (BTG Pactual) on 18 July 2014, when the rating agency affirmed all ratings assigned to BTG Pactual, including the long-term global local and foreign currency deposit ratings at Baa3, as well as the Aaa.br deposit rating in the Brazilian national scale. The short-term ratings remained unchanged. The outlook on all ratings remained stable. The affirmation of BTG Pactual's ratings followed the announcement that BTG Pactual had entered into a binding agreement to acquire 100% shares of BSI Group SA (unrated), including Swiss private bank BSI AG on 14 July 2014.

Moody's took its last rating action on Banco ABC Brasil S.A. (BAB) on 21 March 2013, when the rating agency assigned BAB a long- and short-term foreign currency debt ratings of (P)Baa3 and (P)Prime-3, respectively, to the USD3 billion Global MTN Programme, and a Baa3 foreign currency senior unsecured debt rating to the 2016 senior unsecured notes denominated in Brazilian Reais and settled in US Dollars. All other ratings remained unchanged. Outlook on all ratings remained stable.

Moody's took its last rating action on Banco do Estado do Rio Grande do Sul S.A. (Banrisul) was on 19 January 2012, when the rating agency assigned a Ba1 long-term foreign currency debt rating to its 2022 plain vanilla subordinated unsecured notes. All other ratings remained unchanged with stable outlook.

Moody's took its last rating action on Banco Industrial e Comercial S.A. (BICBANCO) on 1 December 2014, when the rating agency lowered its standalone baseline credit assessment (BCA) to ba2 from ba1. At the same time, Moody's upgraded the long-term global local- and foreign-currency deposit ratings to Baa3 from Ba1; the short-term global local- and foreign-currency deposit ratings to Prime-3 from Not Prime, and the long-term foreign-currency senior unsecured debt rating to Baa3 from Ba1; the long-term foreign-currency subordinated debt rating to Ba1 from Ba2; and the long-term Brazilian national scale deposit rating to Aa1.br from Aa2.br. Also, Moody's affirmed the short-term Brazilian national scale deposit rating of BR-1. The outlook on all these ratings changed to stable.

Moody's took its last rating action on Banco Pan S.A. (Pan) on 18 August 2014, when the rating agency affirmed Pan's standalone baseline credit assessment (BCA) at b1; long- and short-term global local- and foreign-currency deposit ratings at Ba2 and Not Prime, respectively; long-term foreign-currency senior unsecured rating at Ba2; long-term foreign-currency subordinated debt rating at Ba3; as well as the long- and short-term Brazilian national scale deposit ratings at A1.br and BR-1, respectively. The outlook on all ratings was maintained at stable.

Moody's took its last rating action on Banco Pine S.A. (Pine) on 10 April 2015, when the rating agency downgraded Pine's long-term global local and foreign currency deposit ratings and long-term foreign currency senior unsecured debt rating to Ba3 from Ba2, as well as its long-term foreign-currency subordinated debt rating to B1 from Ba3. Pine's Brazilian national scale deposit ratings were also downgraded to A3.br and BR-2, from A1.br and BR-1, long- and short-term, respectively. The downgrades were driven by a decision to lower Pine's baseline credit assessment (BCA) to ba3, from ba2. The short-term global local and foreign currency deposit ratings of Not Prime were not affected by this rating action. The outlook on the long-term ratings is negative.

Moody's took its last rating action on Banco BMG S.A. (BMG) on 5 May 2014, when the rating agency affirmed BMG's B1/Not Prime long- and short-term local and foreign currency deposit ratings, as well as the foreign currency senior unsecured and subordinated debt ratings of B1 and B2, respective, as well as the Brazilian national scale deposit ratings of Baa3.br and BR-3, for long and short-term, respectively. The outlook on all these ratings was changed to stable.

Moody's took its last rating action on Banco Mercantil do Brasil S.A. (BMB) on 3 July 2014, when the rating agency lowered BMB's standalone baseline credit assessment (BCA) to b1, from ba2; downgraded the long-term local and foreign currency deposit ratings to B1, from Ba2; as well as the foreign currency senior unsecured rating to B1, from Ba2, the foreign currency subordinated debt rating to B2, from Ba3, and the Brazilian national scale deposit ratings to Baa3.br and BR-3, from Aa3.br and BR-1, long- and short-term, respectively. The short-term global local and foreign currency deposit ratings of Not Prime were not affected. The outlook on these ratings was changed to negative, from stable.

Moody's took its last rating action on Banco Fibra S.A. (Fibra) on 29 October 2013, when the rating agency downgraded the bank's lowered the baseline credit assessment to b1, from ba3 and downgraded Fibra's long-term global local and foreign currency deposit ratings were also downgraded to B1, from Ba3. At the same time, Moody's also downgraded the bank's Brazilian long-term national scale deposit ratings to Baa1.br, from A2.br. The bank's long-term foreign currency subordinated debt rating was lowered to B2, from B1. The Not Prime short-term global local and foreign currency deposit and national scale ratings remained unchanged. The outlook on all the ratings remained stable.

Moody's took its last rating action on Banco Bonsucesso S.A. (Bonsucesso) on 6 August 2014, when the rating agency affirmed the bank's baseline credit assessment (BCA) at b2, as well as its global local and foreign currency deposit ratings at B2 and Not Prime, long- and short-term, respectively, the long-term foreign-currency subordinated debt rating at B3, and the Brazilian national scale deposit ratings at Ba1.br and BR-4, long- and short-term, respectively. At the same time, Moody's changed its outlook on Bonsucesso's deposit and debt ratings to stable from negative.

REGULATORY DISCLOSURES

For ratings issued on a program, series or category/class of debt, this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series or category/class of debt or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides certain regulatory disclosures in relation to the rating action on the support provider and in relation to each particular rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides certain regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.

For any affected securities or rated entities receiving direct credit support from the primary entity(ies) of this rating action, and whose ratings may change as a result of this rating action, the associated regulatory disclosures will be those of the guarantor entity. Exceptions to this approach exist for the following disclosures, if applicable to jurisdiction: Ancillary Services, Disclosure to rated entity, Disclosure from rated entity.

The following information supplements Disclosure 10 ("Information Relating to Conflicts of Interest as required by Paragraph (a)(1)(ii)(J) of SEC Rule 17g-7") in the regulatory disclosures made at the ratings tab on the issuer/entity page on www.moodys.com.br for each credit rating:

For identification of which credit ratings have payors that have or have not paid Moody's for services other than determining a credit rating in the most recently ended fiscal year, please see the detailed list under the following link: http://www.moodys.com/viewresearchdoc.aspx?docid=PBC_182341. The list is an integral part of this press release.

The below contact information is provided for information purposes only. Please see the ratings tab of the issuer page at www.moodys.com, for each of the ratings covered, Moody's disclosures on the lead analyst and the Moody's legal entity that has issued the ratings.

Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or rating review.

Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.

Please see the ratings tab on the issuer/entity page on www.moodys.com for additional regulatory disclosures for each credit rating.

Ceres Lisboa
VP - Senior Credit Officer
Financial Institutions Group
Moody's America Latina Ltda.
Avenida Nacoes Unidas, 12.551
16th Floor, Room 1601
Sao Paulo, SP 04578-903
Brazil
JOURNALISTS: 800-891-2518
SUBSCRIBERS: 55-11-3043-7300

M. Celina Vansetti
MD - Banking
Financial Institutions Group
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Releasing Office:
Moody's Investors Service, Inc.
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JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653
Moody's takes rating actions on 12 Brazilian banks and assigns CR assessments

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