Fitch Rates Banco Pine S.A. 'B+'.

NEW YORK & SAO PAULO, Brazil & RIO DE JANEIRO, Brazil -- Fitch Ratings has today assigned the following ratings to Banco Pine S.A. (Pine):

--Long-term foreign and local currency Issuer Default Rating (IDR) 'B+';

--Short-term foreign and local currency rating 'B';

--Individual Rating 'D'.

At the same time, Fitch affirms the bank's other ratings as follows:

--National long-term 'BBB(bra)';

--National short-term 'F3(bra)';

--Support '5'.

The Rating Outlook for the IDRs and National long-term rating is Stable.

The ratings consider Pine's track record of satisfactory profitability, adequate liquidity and capitalization ratios -- despite a history of large dividend distributions -- and a reasonably diversified loan portfolio, given its lower dependence on consignment lending compared with its local peers. The ratings also reflect the success of the bank's shareholder reorganization and strategy of activity diversification, while maintaining risks under control. On the other hand, the ratings reflect Pine's lower reserve coverage compared with its peers and the asset and liability concentrations typical of a small niche bank which make it is more susceptible than the larger banks to economic fluctuations.

With the effects of the November 2004 liquidity crisis virtually remedied, Pine was able to increase its deposits at end-2005. This was in addition to successfully tapping other sources of funding through the loan assignment agreement with Banco Bradesco S.A., international issues, receivables-backed funding and assignments to other banks, enabling better management of its assets and liabilities. Similar to other Brazilian banks, Pine has been increasing its loans to compensate for a fall in margins due to a decline in domestic interest rates. However, the bank continues to have a low, though improving, volume of reserve coverage and loan concentrations that could compromise the quality of its assets. Partially mitigating this concern, the bank maintains the policy of securitizing problem loans to a company linked to the group.

The Stable Outlook reflects Fitch's expectation that Pine will maintain its capitalization and liquidity ratios as well as the maintenance of the higher coverage levels evident in recent results over the medium term. Conversely, continued cost pressures and/or deterioration in asset quality ratios could negatively affect the bank's ratings.

Pine, a small multiple bank, was the 44th largest Brazilian bank in assets in March 2006, focusing its activities on lending to medium-sized companies secured by receivables and consignment lending to civil servants. Headquartered in Sao Paulo, Pine was established in 1997 by brothers Noberto and Nelson Pinheiro after the sale of their participations in Banco BMC S.A. in 1996 for succession reasons. In the first half of 2005, Noberto Pinheiro acquired Nelson Pinheiro's holdings, becoming the bank's majority shareholder.

Fitch's national ratings provide a relative measure of creditworthiness for rated entities in countries where the sovereign's foreign and local currency ratings are below 'AAA'. National ratings are not internationally comparable since the best relative risk within a country is rated 'AAA' and other credits are rated only relative to this risk. They are signified by the addition of an identifier, for the country concerned, such as 'AAA (bra)' for national ratings in Brazil.

Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, 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.