OREANDA-NEWS. Fitch Ratings has reviewed the ratings of the following Brazilian small and midsized banks:

-- Banco BMG S.A. (BMG)
-- Banco Bonsucesso S.A. (Bonsucesso)
-- Banco Fator S.A. (Fator)
-- Banco Indusval S.A. (Indusval)
-- Banco Intermedium S.A. (Intermedium)
-- Banco Original S.A. (Original)
-- Banco Rendimento S.A. (Rendimento)
-- Banco Sofisa S.A. (Sofisa)
-- BR Partners Banco de Investimento S.A. (BR Partners)

All ratings have been affirmed.

Banks included on this peer review are small and midsize banks with total assets not greater than BRL18 billion, as of June 2015, and with a niche approach either on the payroll, auto-loans, middle-market, or fee service segments. Most of those banks present limited franchises and sometimes reliance on somewhat volatile businesses model, which exposes them to higher competition from banks with broader company profiles.

Several banks are expanding their operations, due to their recent inception, as is the case of Original, or new market prospects, the case of Intermedium which has been exploring opportunities in the home-equity business. Other banks are positioning themselves in a defensive approach, reducing their size and scope in order to protect their franchises trough the challenging environment. Entities like Bonsucesso and BMG, are in the middle of the completion of a significant spin off of legacy operations and venturing to expand their size in other business.

Overall earnings for this group of banks remained modest, average ROAA at 0.7% during the first six months of 2015, as many of them reduced their appetite or had to deal with specific problems on their credit portfolios, which in general presents above-average concentration. Future earnings expectations remain challenged by the operating environment, in Fitch view.

Funding remains a constraint, a typical risk for small and medium-size banks, who do not have a retail distribution and relies mostly on institutional investors, but liquidity and capital positions remained adequate backed by deleveraging on most of the balance sheets, or sale of credit portfolio (as is the case of Bonsucesso.

Fitch has affirmed the following ratings:

BMG
--Long-term foreign and local currency IDRs affirmed at 'BB-', Outlook Stable;
--Short-term foreign and local currency IDRs affirmed at 'B';
--Viability rating affirmed at 'bb-';
--Long-term national rating affirmed at 'A(bra)', Outlook Stable;
--Short-term national rating affirmed at 'F2(bra)';
--Support rating affirmed at '5'.

Bonsucesso
--Long-term foreign and local currency IDRs affirmed at 'B', Outlook Stable;
--Short-term foreign and local currency IDRs affirmed at 'B';
--Viability rating affirmed at 'b';
--Long-term national rating affirmed at 'BBB(bra)', Outlook Stable;
--Short-term national rating affirmed at 'F3(bra)';
--Support rating affirmed at '5'.

Fator
--Long-term national rating affirmed at 'BBB-(bra)', Outlook Negative;
--Short-term national rating affirmed at 'F3(bra)'.

Indusval
--Long-term national rating affirmed at 'BB+(bra)', Outlook Stable;
--Short-term national rating affirmed at 'B(bra)'.

Intermedium
--Long-term national rating affirmed at 'BBB(bra)', Outlook Stable;
--Short-term national rating affirmed at 'F3(bra)'.

Original
--Long-term foreign and local currency IDRs affirmed at 'B+', Outlook Stable;
--Short-term foreign and local currency IDRs affirmed at 'B';
--Viability rating affirmed at 'b+';
--Long-term national rating affirmed at 'BBB+(bra)', Outlook Stable;
--Short-term national rating affirmed at 'F2(bra)';
--Support rating affirmed at '5'.

Rendimento
--Long-term national rating affirmed at 'BBB+(bra)', Outlook Stable;
--Short-term national rating affirmed at 'F2(bra)'.

Sofisa
--Long-term national rating affirmed at 'A-(bra)', Outlook Stable;
--Short-term national rating affirmed at 'F2(bra)'.

BR Partners
--Long-term national rating affirmed at 'BBB(bra)', Outlook Stable;
--Short-term national rating affirmed at 'F3(bra)'.