Fitch affirms Banco do Brasil, Banco Votorantim

Fitch Ratings said it affirmed the ratings of Banco do Brasil SA and Banco Votorantim SA, including their BBB- long-term foreign- and local-currency issuer default ratings, F3 short-term foreign- and local-currency issuer default ratings, 2 support ratings, C/D individual ratings, AA+(bra) national long-term ratings and F1+(bra) national short-term ratings.

The agency also affirmed the AA+(bra) national long-term rating on BV Leasing Arrendamento Mercantil SA's first and second issuances of debentures.

The outlook is stable.

The affirmation follows the announcement by Banco Votorantim's controlling shareholder, Votorantim Financas, and Banco do Brasil that the latter proposes to acquire 49.99% of Banco Votorantim's voting capital and 50% of its total capital.

Fitch said the proposed acquisition represents less than 10% of combined asset and loan portfolios after the acquisition and would give Banco do Brasil a significant presence in Brazil's vehicle financing market, the recognized know-how of Banco Votorantim in the provision of commercial and investment banking products and a broader range of brokerage services.

For Banco Votorantim, the proposed transaction would provide access to Banco do Brasil's established funding base, allowing it to continue to generate quality assets in its consumer finance and corporate businesses, the agency said.

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