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Fitch Assigns IDRs to Banco ABN AMRO Real S.A.

SAO PAULO, Brazil & RIO DE JANEIRO, Brazil & NEW YORK -- Today, Fitch Ratings has assigned the following ratings to Banco ABN AMRO Real S.A. (ABNR):

--Long-term Foreign Currency Issuer Default Rating (IDR) 'BB+';

--Short-term Foreign Currency rating 'B';

--Long-term Local Currency IDR 'BBB-';

--Short-term Local Currency 'F3';

--Individual 'C'.

In addition, Fitch affirms the bank's other ratings as follows:

--National long-term at 'AA+(bra)';

--National Short-term at 'F1+(bra)';

--Support rating at '3'.

The Rating Outlook for the IDRs and National long-term rating is Positive, reflecting the Positive Outlook of the Brasil's sovereign IDR.

The IDR's (above the sovereign rating) and the National Ratings of ABNR are based on the potential support of the shareholder, ABN AMRO Bank NV (ABN NV, rated 'AA-/F1+'), given its strategic importance to its parent. The Foreign Currency IDR is constrained by the sovereign ceiling. The Individual Rating reflects ABNR's consistent performance, the good quality of its management and a historically well-developed, diversified and segmented franchise. Although the ratings are assigned to ABNR, the analysis is based on the ABN Amro Real Financial Conglomerate (CFA), using a pro forma consolidation of its companies in Brazil.

Active in Brazil since 1917, ABN NV has invested in Brazil's markets even in periods of crisis, such as in 1998 and 2003, with the acquisitions of Banco Real and Banco Sudameris Brasil S.A., respectively which significantly expanded and consolidated its position as one of the leading universal banks in Brazil. As has been widely reported, ABN NV is currently the subject of active negotiations which could result in its sale to new controlling shareholders. These negotiations to date indicate that such new shareholders will likely be highly rated global financial institutions, with ratings similar to or better than those of ABN NV. Should the negotiations result in such a change of control among strong shareholders, ABNR's IDRs and national rating would not be affected, given the strength of the potential shareholders and ABNR's solid Brazilian franchise, which would likely make its presence in Brazil's expanding commercial banking market attractive to the potential new shareholders. Should the negotiations result in a different outcome, Fitch would evaluate any potential effects on ABNR's ratings at that time; any potential downward pressure on ABNRs IDRs would be limited by the bank's relatively strong individual rating.

Due to an increase in lending, mainly to small and medium-sized companies (SMEs) and individuals, ABNR's performance improved sharply in 2006, growing in line with the peer average. An expanded retail business and greater scale are expected to continue to benefit its earnings, as are its good cost controls.

Established in 1917, ABNR is the lead institution of the third-largest private financial conglomerate in Brazil in terms of assets, loans, deposits and branches (1,095). It is 97.42% controlled by ABN NV, one of the 20 largest financial groups in the world.

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.
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Publication:Business Wire
Date:Apr 30, 2007
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