Fitch Upgrades Banco Santander (Brasil)'s IDRs to 'BBB+ ', Outlook Stable

Wed Jun 4, 2014 5:19pm EDT

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(The following statement was released by the rating agency) SAO PAULO/RIO DE JANEIRO/NY, June 04 (Fitch) Fitch Ratings has today upgraded Banco Santander (Brasil) S.A.'s (SANBRA) Issuer Default Ratings (IDRs) to 'BBB+' from 'BBB', Outlook Stable following the May 29th upgrade of Banco Santander S.A. Spain's (SAN) IDRs and Viability Ratings (VR) (see the Fitch release 'Fitch Upgrades Santander and BBVA to 'A-'; Stable Outlook', dated May 29 2014, available at www.fitchratings.com). Fitch has also withdrawn SANBRA's 'BBB-' Support Rating Floor (SRF) and affirmed its Support Rating (SF) at '2'. A complete list of rating actions for the bank and each subsidiary is included at the end of this press release. KEY RATING DRIVERS The upgrade of SANBRA's Long-Term Foreign and Local Currency IDR reflects the support that Fitch believes the bank would receive from its parent SAN, should it be needed. Fitch views SANBRA as a core subsidiary for SAN, sharing the same brand, presenting high integration and having contributed 20%-26% of the group' s consolidated net income over the past few years. Fitch is maintaining a one-notch differential in view of SANBRA's size relative to SAN according to Fitch Criteria: Rating FI Subsidiaries and Holding Companies. SANBRA's VR was unaffected, as it was recently affirmed on May 23 2014 (see 'Fitch Affirms Banco Santander (Brasil) and Santander Leasing S.A. Arrendamento Mercantil'). The Support rating, affirmed at '2', reflects Fitch's view that there is high probability of support to SANBRA from SAN, if needed. The withdrawal of SANBRA's SRF reflects Fitch's view that parent support, if needed, is now more likely than sovereign support. The previous SRF of SANBRA was assigned at a time when the parent was facing considerable rating downward pressure due to Spain's sovereign rating. Therefore, Fitch assigned this SRF to indicate the level below which the agency would not lower the bank's IDRs due to the propensity of sovereign support, given the bank's systemic importance. Since the rating trend of the parent has reversed, Fitch now believes that parent support is more likely than sovereign support, thus the sovereign-driven SRF is no longer relevant. RATING SENSITIVITIES Fitch acknowledges that the reputations of the parent, SAN, and its subsidiaries in Latin America are somewhat interdependent and correlated. In such cases, further upgrades or downgrades at the parent level or changes in market perception concerning SAN's Brazilian subsidiaries, may trigger further rating reviews. Also the support of SANBRA could be revised upward if the parent rating is further upgraded. In addition, Fitch considers that there is limited downside potential for this rating, even in the event of a deterioration of the parent's capacity to provide support, since the sovereign would likely maintain a high probability of support under that event, due to SANBRA's systemic importance. Fitch has taken the following rating actions: Banco Santander (Brasil): --Long-term Local currency IDRs upgraded to 'BBB+' from 'BBB'; Outlook Stable; --Long-term Foreign currency IDRs upgraded to 'BBB+' from 'BBB'; Outlook Stable. Senior notes due 2015: --Long-term Foreign Currency rating upgraded to 'BBB+' from 'BBB'. Senior notes due 2016: --Long-term Foreign Currency rating upgraded to 'BBB+' from 'BBB'. Senior notes due 2017: --Long-term Foreign Currency rating upgraded to 'BBB+' from 'BBB'. --Support Rating Floor affirmed at '2'. --Support Rating Floor of 'BBB-' withdrawn. The VR and National ratings were unaffected by these actions. Contact: Primary Analyst Robert Stoll Director +1-212-908-9155 Fitch Ratings, Inc. 33 Whitehall St. New York, NY 10004 Secondary Analyst Eduardo Ribas Director +55-11-4504-2213 Committee Chairperson Franklin Santarelli Managing Director +1-212-908-0739 Media Relations: Elizabeth Fogerty, New York, Tel: +1 (212) 908 0526, Email: elizabeth.fogerty@fitchratings.com. Additional information is available at 'www.fitchratings.com'. Applicable Criteria and Related Research: Rating FI Subsidiaries and Holding Companies Global Financial Institutions Rating Criteria Applicable Criteria and Related Research: Rating FI Subsidiaries and Holding Companies here Global Financial Institutions Rating Criteria here Additional Disclosure Solicitation Status here ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: here. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

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