Fitch Affirms Banco Safra S.A. Ratings

RIO DE JANEIRO & SAO PAULO--(Business Wire)--
Fitch Ratings has affirmed all ratings of Banco Safra S.A. (Safra), Safra
Leasing S.A. - Arrendamento Mercantil, as well as its debenture issuances, as
follows:

Banco Safra S.A.

--Long-term foreign Issuer Default Rating (IDR) at 'BBB-', Outlook Stable;

--Short-term foreign currency IDR at 'F3';

--Long-term local currency IDR at 'BBB-', Outlook Stable;

--Short-term local currency IDR at 'F3';

--Individual rating at 'C';

--Long-Term national rating at 'AA+(bra)', Outlook Stable;

--Short-term national rating at 'F1+(bra)';

--Support rating at '4';

--Support rating floor at 'B+'.

Safra Leasing S.A. - Arrendamento Mercantil

--Long-term national rating at 'AA+(bra)', Outlook Stable;

--Short-term national rating at 'F1+(bra)'.

Safra Leasing S.A. - 12th, 13th, 14th and 15th Issuance of debentures

--Long-term national rating at 'AA+(bra)';

Banco Safra BRL300 million notes

--Long-term local currency rating at 'BBB-'.

The long-term Rating Outlooks remain Stable.

The affirmation of Safra's ratings reflects the bank's capacity and agility to
manage risks and adapt its balance sheet during periods of economic volatility,
its consistent performance, with conservative practices in managing credit
exposures, and good controls on its collateral stream. In addition, the ratings
also consider its greater relative dependence on institutional and large
corporate funding and net interest income, high exposure to sovereign risk and a
policy of maximizing return on its capital base, which, over time, can translate
to growing leverage. In Fitch's opinion, Safra's ratings could be affected by an
eventual marked deterioration in its loan portfolio or its capitalization.
Upside to current ratings is limited, given concentrations evident in its
revenue stream and on its balance sheet.

In response to the worsening of the global financial crisis, Safra was agile in
bolstering its liquidity to face some redemptions by institutional investors and
large corporations in the fourth quarter 2008 (4Q'08), as well as in managing
its assets and liabilities, reducing its credit and market risk exposures, while
slowing the growth of credit operations, including in retail, where it has
cautiously initiated a number of projects which are still in the development
phase. Liquidity has remained strong since October 2008, and the bank has been
more selective in the credit approval process due the expectation of greater
delinquencies in 2009; this pressure on asset quality should continue, though it
may be partially offset by higher spreads going forward. Fitch believes that
profitability in 2009 will be more modest than historical levels given limited
balance sheet growth as a result of the economic downturn and higher credit
costs.

Safra maintained satisfactory asset quality, despite the increased pressure
expected on its performance. The bank's asset quality ratios have been
historically stronger than the peer average, notwithstanding the expansion of
its financing operations to often higher risk small and medium-sized companies
(SMEs) and individuals in recent years (39% and 13% of the average portfolio of
BRL27.8 billion at end-1Q'09). Loan loss reserves, equivalent to 84.1% of
impaired loans and 246.3% of loans past due over 60 days at end-1Q'09 (90.7% and
308.3% at fiscal year-end 2008 [FYE08], respectively), are adequate, given a
track record of limited credit losses.

While capitalization ratios have benefited from the pause in balance sheet
growth, Fitch anticipates Safra's capitalization will come under pressure when
the bank starts its resumption of growth, and revert closer to historically
lower levels. The regulatory capital ratio was 16.9% at end-1Q'09. Capital is
largely Tier 1, and deferred tax assets, while higher than in the past, are
still quite low relative to its local peers.

Safra is 100%-controlled by the Joseph Safra family and was the sixth-largest
private bank in Brazil in terms of total assets and equity at 1Q'09. The bank
and its subsidiaries offer a wide range of banking services to large companies,
SMEs, institutional investors and high-income individuals.

Fitch's rating definitions and the terms of use of such ratings are available on
the agency's public site, 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 Ratings
Maria Rita Goncalves, +55-21-4503-2600 (Rio de Janeiro)
Pedro Gomes, +55-11-4504-2600 (Sao Paulo)
Media Relations:
Jaqueline Carvalho, Tel: +55 21 4503 2623 (Rio de Janeiro)
jaqueline.carvalho@fitchratings.com

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