April 5, 2012 / 8:02 PM / 5 years ago

TEXT-Fitch affirms Banco do Nordeste do Brasil

April 5 - Fitch Ratings has affirmed all ratings of Banco do Nordeste do
Brasil S.A (BNB), as follows:	
	
--Foreign and Local Currency Long-Term Issuer Default Rating (IDR) at 'BBB';
Outlook Stable;	
--Foreign and Local Currency Short-Term IDR at 'F2';	
--Viability Rating at 'bb-'	
--Support Rating at '2';	
--Support Rating Floor 'BBB'	
--National Long-Term Rating at 'AAA(bra)'; Outlook Stable;	
--National Short-Term Rating at 'F1+(bra)'.	
	
The IDRs and National ratings of Banco do Nordeste do Brasil S.A. (BNB), which
are equal to the Federal Republic of Brazil's Sovereign foreign currency IDR are
derived from the support of its main shareholder, the National Treasury, an
entity fully controlled by the Brazilian Federal Government. This support also
reflects the importance of BNB for the development of Brazil's northeast region.
A change in the sovereign rating of Brazil would directly influence the IDRs of
the bank.	
	
BNB's Viability Rating (VR) reflects the ongoing support the bank receives from
holding full and exclusive managerial control over the Constitutional Fund of
the Northeast (FNE, BRL37.7 billion of equity at FY2011). This support
supersedes the bank's weak financial profile as exhibited by poor asset quality
and risk management, worsening capitalization, and below-average profitability.
The VR also incorporates the bank's exposure to political influence. Even though
the bank does not directly own the fund, the Brazilian Constitution grants the
bank power to manage the fund's resources. Therefore, any changes on the bank's
exclusivity to control FNE, the fund's financial capacity to absorb assets
transferred from the bank, or to continue supporting BNB could lead to a
downgrade in the VR. No near-term improvement in the VR is foreseen by Fitch.	
	
Created by federal law in 1952, BNB is one of the main organizations controlled
by the government with the mission to develop Brazil's northeast region,
involving the states of Maranhao, Piaui, Ceara, Rio Grande do Norte, Paraiba,
Pernambuco, Alagoas, Sergipe, Bahia, and the north of Minas Gerais and Espirito
Santo.	
	
Additional information is available at 'www.fitchratings.com'. The ratings above
were solicited by, or on behalf of, the issuer, and therefore, Fitch has been
compensated for the provision of the ratings.	
	
Applicable Criteria and Related Research:	
National Ratings, Methodology Update, Jan. 19, 2011;	
Global Financial Institutions Rating Criteria, Aug. 16, 2011;	
Treatment of Hybrids in Bank Capital Analysis, July 11, 2011.	
	
Applicable Criteria and Related Research:	
National Ratings Criteria	
Global Financial Institutions Rating Criteria	
Treatment of Hybrids in Bank Capital Analysis

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