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Fitch Affirms Ratings of Banco Societe Generale Brasil, Banco Cacique and Banco Pecunia

  Fitch Affirms Ratings of Banco Societe Generale Brasil, Banco Cacique and
  Banco Pecunia

Business Wire

RIO DE JANEIRO & SAO PAULO -- March 21, 2013

Fitch Ratings has affirmed the Issuer Default Rating (IDR) and National rating
of Banco Societe Generale Brasil S.A. (SGBr) and its two wholly-owned
subsidiaries, Banco Cacique S.A. (Cacique) and Banco Pecunia S.A. (Pecunia).
All the Rating Outlooks remain Stable. A full list of rating actions can be
found at the end of this release.

KEY RATING DRIVERS

SGBr:

The affirmation of SGBr's ratings reflects the continued support from its
parent Societe Generale (SG, Fitch IDR of 'A+' with a Negative Outlook). Fitch
classifies SGBr as a 'strategically important' subsidiary of SG, given their
common branding, the unquestioned support from the parent as evidenced by the
capital injections of 2011 and 2012, high proportion of parental non-equity
funding, very strong operational synergies, and high level of managerial and
commercial integration with SG. SGBr's local currency (LC) long-term (LT) IDR
is set at the maximum level attributed to Brazilian banks and its foreign
currency (FC) LT IDR is constrained by Brazil's country ceiling.

SG continues to be SGBr's main source of funds (70% of consolidated funding at
FYE2012). Given the expected deleveraging of its subsidiaries, SGBr's funding
needs are also easing. Therefore, SGBr is unlikely to renew the interbank
lines it received following the changes in the Brazilian compulsory reserve
requirements in the first half of 2012 and should pre-liquidate part of its
funding from SG. Overall, the mix of funding is not expected to change
significantly.

In 2012, SGBr's performance continued to be dragged down by Cacique and
Pecunia. The bank posted a loss of BRL551 million, BRL308 million of which
pertains to the subsidiaries. The bulk of the remaining losses is explained by
SGBr's write off of its goodwill (BRL160 million) from its own balance sheet.
SG injected a total of BRL317 million in SGBr in December 2012 (BRL353 million
in 2011) to compensate for the period's loss, the majority of which was
transferred to its two subsidiaries. Fitch believes that SGBr would receive
further capital in case of need.

Cacique and Pecunia:

The affirmation of the ratings of Cacique and Pecunia also reflects the
continued support from their ultimate parent, SG, which owns the banks through
its wholly owned subsidiary SGBr. Fitch classifies both banks as subsidiaries
of 'limited importance' for SG, given that their contribution to the group's
results has been minimal and unlikely to increase in the near future
considering their ongoing deleveraging, and that there are limited synergies
between the banks and parent. However, Fitch recognizes that SG's support has
been unquestioned, as evidenced by the capital injections in 2011 and 2012,
high proportion of parental non-equity funding, and high managerial
integration. It is unlikely that there will be a change in this stance given
the relatively low cost of potential support. Their LC LT IDRs are set at the
maximum level attributed to Brazilian banks and their FC LT IDRs are
constrained by Brazil's country ceiling.

Almost all of Cacique and Pecunia's non-equity funding comes from SGBr (99% in
2012), which transfers the funds it receives both from SG and from the
domestic market. The banks aim to increase funding from third parties to
25%-30% of their total funding over the medium term.

Half of Cacique and Pecunia's loss in 2012 is explained by the write-off of
goodwill and deferred tax assets (BRL159 million). SG, via SGBr, injected
BRL359 million to the two banks (BRL292 million in 2011) to restore their
capital. Fitch believes that they would receive further injections in case of
need. Central Bank of Brazil supervises and monitors the regulatory capital
ratios of SGBr and its two subsidiaries on a consolidated basis.

The probability of support of all three banks by SG is high, as reflected by
their Support rating of '2'. Fitch does not assign Viability ratings to the
banks given their high operational and financial dependence on SG.

RATING SENSITIVITIES

Positive rating drivers: A Brazilian sovereign rating upgrade or change in its
Rating Outlook could lead to similar changes in the ratings of all three
banks. An upgrade of SG's ratings or change in its Outlook would not have an
impact on the ratings, as long as the sovereign rating remains unchanged.

Negative rating drivers: A Brazilian sovereign rating downgrade or change in
its Outlook could lead to similar changes in the ratings of all three banks. A
downgrade of SG's IDR could also lead to a downgrade of the IDRs of the
Brazilian subsidiaries, depending on the severity of the downgrade.

Fitch has affirmed the following ratings:

SGBr:

--Foreign Currency Long-term IDR at 'BBB+', Outlook Stable;

--Local Currency Long-term IDR at 'A-', Outlook Stable;

--Foreign Currency Short-term IDR at 'F2';

--Local Currency Short-term IDR at 'F1';

--Support Rating at '2';

--National Long-term Rating at 'AAA(bra)', Outlook Stable;

--National Short-term Rating at 'F1+(bra)'.

Cacique:

--Foreign Currency Long-term IDR at 'BBB+', Outlook Stable;

--Local Currency Long-term IDR at 'A-', Outlook Stable;

--Foreign Currency Short-term IDR at 'F2';

--Local Currency Short-term IDR at 'F1';

--Support Rating at '2';

--National Long-term Rating at 'AAA(bra)', Outlook Stable;

--National Short-term Rating at 'F1+(bra)'.

Pecunia:

--Foreign Currency Long-term IDR at 'BBB+', Outlook Stable;

--Local Currency Long-term IDR at 'A-', Outlook Stable;

--Foreign Currency Short-term IDR at 'F2';

--Local Currency Short-term IDR at 'F1';

--Support Rating at '2';

--National Long-term Rating at 'AAA(bra)', Outlook Stable;

--National Short-term Rating at 'F1+(bra)'.

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 Criteria (Jan. 19, 2011);

-- Rating FI Subsidiaries and Holding Companies (Aug. 10, 2012);

-- Global Financial Institutions Rating Criteria (Aug. 15, 2012).

Applicable Criteria and Related Research

Global Financial Institutions Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=686181

Rating FI Subsidiaries and Holding Companies

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=679209

National Ratings Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=595885

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PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK:
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DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S
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METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF
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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.

Contact:

Fitch Ratings
Primary Analyst
Esin Celasun, +55 21 4503 2626
Associate Director
Fitch Ratings Brasil Ltda.
Praca XV de Novembro, 20 - 401 B
Rio de Janeiro, RJ, Brasil
or
Secondary Analyst
Eduardo Ribas, +55 11 4504 2213
Associate Director
or
Committee Chairperson
Ed Thompson, +1 212-908-0364
Senior Director
or
Media Relations:
Brian Bertsch, +1 212-908-0549
brian.bertsch@fitchratings.com
 
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