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April 18, 2008 |
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BANCO PINE: Fitch Holds B+/B ID Ratings With Positive Outlook Fitch Ratings has affirmed Banco Pine S.A.'s ratings as: -- Long-term foreign and local currency issuer default rating: affirmed at 'B+' -- Short-term foreign and local currency issuer default rating: affirmed at 'B' -- Individual rating: affirmed at 'D' -- Support rating: affirmed at '5' -- Support rating floor: affirmed at 'No Floor' -- National long-term rating: affirmed at 'A-(A minus)(bra)' -- National short-term rating: affirmed at 'F2(bra)' The outlooks for the long-term IDRs and national long-term rating remain positive Banco Pine's ratings reflect its track record of good profitability levels with a history of satisfactory asset quality, adequate liquidity and capitalisation ratios, and proven capacity to originate secured consignment (payroll discount) and receivables-based lending. On the other hand, they also take into consideration its modest size that makes it more vulnerable to a financial crisis, evident in concentrations in its loan portfolio and funding, as well as the efforts to expand funding at lower costs and manage the strong loan origination without compromising asset quality and capitalisation ratios. The positive outlook for Banco Pine's ratings reflect Fitch's expectations that, over the next year, the bank can adequately manage sustained and rapid loan growth, while maintaining its track record of good asset quality and the profitability needed to sustain an adequate level of capitalization, whilend further diversifying its funding base. Fitch will closely monitor the bank's growth goals to ensure they do not deteriorate asset quality and/or squeeze capitalisation levels. Fitch believes that Banco Pine's regulatory capital ratios, like those of several of its local peers, have overstated the bank's effective capitalisation to date, given the significant volume of loans sold to other banks with recourse. Regulatory changes expected to be implemented shortly will require banks to fully include loan sales with any form of recourse in regulatory capital calculations. Banco Pine is a medium-sized bank with commercial and investment portfolios] primarily focused on lending to medium-sized companies and specialises in consignment loans to civil servants. At fiscal year ended 2007, it had BRL5.7 billion in assets and BRL800 million in equity. Headquartered in Sao Paulo, Banco Pine was established in 1997 by the brothers Nelson and Noberto Pinheiro after the sale in 1996 of their participation in another family institution. A comprehensive corporate and operational restructuring was implemented and in the first half of 2005 Noberto Pinheiro became the bank's majority shareholder. In April 2007, Banco Pine went public by placing non-voting preferred shares at the Bovespa Level 1 on the New Brazilian Stock Market. These shares enjoy a tag-along privilege, giving minority shareholders 100% of the value of the block of controlling shares in the event of the sale of the institution. |
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