Bradesco, Brazil’s second largest private bank, announced Friday that it plans to enter the Mexican retail banking market through the acquisition of Ibi Mexico.
The purchase, for an undisclosed sum, is outlined in a memorandum of understanding Bradesco signed with Ibi’s corporate parent, Cofra Holding AG, a holding company that also owns the C&A Mexico retail chain.
Bradesco, Brazil’s No. 2 non-state bank – Itaú-Unibanco is number 1 – said it expects the transaction to be completed by March 30, subject to regulatory approval in both countries.
Ibi Mexico’s loan portfolio amounts to the equivalent of 100 million US dollars and it has issued more than 1 million credit cards, Bradesco said. The Mexican institution’s shareholder equity is 566 million pesos (US$ 43.8 million).
The deal includes a 20-year partnership “to jointly and exclusively sell financial products and services through the C&A Mexico chain. Bradesco.
Marcelo Noronha, Bradesco Cards’ director says that the bank sees the deal as an opportunity to sell insurance and enter the lending market in Mexico.
“Mexico and Brazil are the two main economies in Latin America. Obviously there is an enormous potential in that market on demand of financial products,” he told reporters.
Since early 2009, when he became president of Bradesco, Luiz Carlos Trabuco Cappi, has emphasized that the focus of the institution is to expand its presence in Brazil. In November, Bradesco announced it was present in all 5,564 municipalities in the country.