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Fitch: Banco BMG S.A. Ratings to be Reviewed After Activation of Joint Venture with Itau Unibanco

  Fitch: Banco BMG S.A. Ratings to be Reviewed After Activation of Joint
  Venture with Itau Unibanco

Business Wire

NEW YORK -- July 12, 2012

Fitch Ratings advised today that it will conclude the BMG ratings review after
receiving further details and projections regarding the establishment of the
joint venture with Itau Unibanco S.A. in the consumer loan segment known as
'Consignado'. After its approval and depending on the relevance of the
potential impacts of this joint venture on BMG's capital ratios and
profitability, the bank's ratings may be affected. A full list of current
ratings follows at the end of this press release.

On July 10th, 2012, BMG announced an agreement with Itau Unibanco S.A. to form
the newly named Banco Itau BMG Consignado S.A. in which Itau Unibanco S.A.
will have a 70% stake and BMG 30% stake. The initial capital will be R$1
billion. In addition to this capital commitment Itau Unibanco will be
providing funding of up to R$300 million per month for the booking of loan
transactions for a period of at least five years with competitive rates.

Fitch positively views this announcement especially given the strong
commitment by Itau Unibanco (Long-term Foreign Currency IDR 'BBB+' National
Scale Rating AAA(bra) by Fitch) which is evidenced by the Itau name on the
joint venture and the extension of a funding line at competitive rates. In
addition, BMG expects to benefit from a substantial reduction in its
operational costs as origination, monitoring, collection and other costs will
be proportionally assumed by the joint venture. Also, the creation of this
joint venture will enable a gradual reduction of BMG's R$33 billion
risk-weighted assets as existing loans come due or are pre-paid. This is
expected to result in a much-needed improvement to BMG's regulatory capital
ratios which are currently very tight.

Over the next two years, the joint venture is expected to grow its new loan
portfolio up to R$12 billion which would nearly double Itau Unibanco's current
portfolio and significantly increase its market share of this consumer finance
segment where it currently holds a position behind several of its main
competitors. Currently BMG has the second largest market share of this
approximately R$172 billion consumer lending segment. Subject to regulatory
approvals and internal logistics BMG expects the joint venture to begin
operating by the fourth quarter of this year. BMG is also expected to benefit
indirectly from in the area of corporate governance in view of the additional
experience of directors provided by Itau Unibanco to the joint venture.

BMG has shown to maintain comfortable levels of liquidity even during the
recent nervousness following the intervention of Banco Cruzeiro do Sul and
this is expected to continue while the joint venture is being formalized.

It is important also to mention that all potential benefits and impacts on
BMG's capitalization and profitability ratios will be reviewed by the agency
as certain costs will not be able to be transferred, such as the need to
amortize the significant volume of goodwill in the amount of BRL1.6 billion
from the acquisition of Banco Schahin, which had a direct impact on BMG's
Fitch's core capital ratio. Fitch will need to review BMG's revised business
plan and forecasts on how it will improve its capital and profitability ratios
including how it will benefit from its accrued tax credits. BMG management has
committed to provide these details as they develop which will enable Fitch to
evaluate potential impacts to BMG's ratings.

Headquartered in Belo Horizonte, Minas Gerais, BMG has been conducting
business as a multiple bank since 1989. It is controlled by the Pentagna
Guimaraes family. In the financial sector since 1930, the bank is the family's
primary business, however, they also hold investments in real estate,
agribusiness and the food processing sector.

Fitch currently rates BMG as follows:

BMG:
--Long-term foreign currency Issuer Default Rating (IDR) 'B'; Outlook Stable;
--Short-term foreign currency IDR 'B';
--Long-term local currency IDR 'B'; Outlook Stable;
--Short-term local currency IDR 'B';
--National long-term rating 'BBB(bra)'; Outlook Stable;
--National short-term rating 'F3 (bra)';
--Viability rating 'b-';
--Support rating '4';
--Support rating floor 'B'.

Additional information is available on www.fitchratings.com or
www.fitchratings.com.br.

Applicable Criteria and Related Research:
--'Global Financial Institutions Rating Criteria' (Aug. 16, 2011);
--'National Ratings: Methodology Update' (Jan. 19, 2011).

Applicable Criteria and Related Research:
Global Financial Institutions Rating Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=649171
National Ratings Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=595885

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS.
PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK:
HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. 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.

Contact:

Fitch Ratings
Primary Analyst:
Robert Stoll, +1-212-908-9155
Director
Fitch, Inc.
One State Street Plaza
New York, NY 10004
or
Secondary Analyst:
Luiz Claudio Vieira, +55-21 4503-2600
Senior Analyst
or
Media Relations:
Jaqueline Carvalho, +55 21 4503 2623
jaqueline.carvalho@fitchratings.com
Elizabeth Fogerty, +1-212-908-0526
elizabeth.fogerty@fitchratings.com