Fitch Affirms Brown Brothers Harriman at ‘A+/F1’; Outlook Stable

NEW YORK--(BUSINESS WIRE)-- Fitch Ratings has affirmed the Issuer Default Ratings (IDRs) and outstanding ratings for Brown Brothers Harriman & Co. (BBH) as follows:

--Long-term IDR at 'A+';

--Short-term IDR at 'F1';

--Individual at 'A/B';

--Support at '5';

--Support Floor at 'NF'.

The Rating Outlook is Stable.

BBH's ratings are based on the company's consistent operating performance and its strong specialized franchise in global custody. Ratings also reflect BBH's low-risk, no-debt balance sheet and ample capital and liquidity positions. Since 2009, performance has been somewhat impacted by the lower interest rate environment, but revenues and profits have gradually rebounded in the first half of fiscal 2010 due to the general uptick in financial markets.

Credit quality of the loan and investment portfolio withstood the recent financial crisis, reflecting the firm's robust risk management system and its overall low-risk appetite. BBH was the only U.S. custodial bank that did not need to provide support to sponsored money market or other pooled funds, which further speaks to the firm's conservative risk tolerance culture.

The Stable Outlook reflects Fitch's expectation for consistent operating performance and the maintenance of solid capital and liquidity positions. Ratings are constrained by BBH's low business diversity and scale compared to peers and the business model's sensitivity to external factors such as financial asset prices and interest rates.

Founded in 1818 and organized as a partnership, BBH is the oldest and largest privately owned bank in the U.S., operating through 16 offices worldwide and serving clients in over 100 countries. Key products are global custody, foreign exchange services, investment & wealth management, and private/corporate banking. While BBH's 'Statement of Condition' is audited by a CPA firm, due to its partnership status the company is not required to obtain audited income statements. Fitch notes this as a limiting factor in its financial analysis. However, BBH supplies Fitch with a substantial level of non-public information on earnings, and Fitch has factored this information into its ratings.

Additional information is available at 'www.fitchratings.com'

Applicable Criteria and Related Research:

--'Global Financial Institutions Rating Criteria', Aug. 16, 2010;

--'Investment Manager and Alternative Funds Criteria, Dec. 30, 2009.

Applicable Criteria and Related Research:

Global Financial Institutions Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=547685

Investment Manager and Alternative Funds Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=590125

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Fitch Ratings
Primary Analyst
Mohak Rao, CFA, +1-212-908-0559
Director
Fitch, Inc.
One State Street Plaza,
New York, NY 10004
or
Secondary AnalystDavid Spring, CFA, +1-312-368-3194
Senior Director
or
Committee ChairpersonSharon Haas, +1-212-908-0362
Managing Director
or
Media Relations:Brian Bertsch, +1-212-908-0549
Email: [email protected]

Source: Fitch Ratings