Latin America’s biggest bank by assets, Banco do Brasil, plans the acquisition of banks in Chile and the United States and is holding negotiations to further expand in Peru, Colombia and Uruguay, said Aldemir Bendine the bank’s CEO.
Interviewed by daily financial newspaper Valor Econômico, Bendine said the bank targets to become a global conglomerate and is considering 17 possible acquisitions in the US including the purchase of at least two of them.
For this the Brazilian bank has hired Royal Bank of Canada to advice on the acquisition after an attempt in March to acquire Millennium BCP Bank failed for lack of a Federal Reserve license.
Banco do Brasil didn’t receive Financial Holding Status from the Fed until April 13, two weeks after a rival acquired Millennium. The new status, following an application in 2007, gives Banco do Brasil the same privileges in the U.S. as a local bank.
Banco do Brasil is looking to expand in the US to cater to a growing number of Brazilian companies with operations in the country, as well as the 1.5 million Brazilians living there. The bank plans to provide commercial and investment banking services tailored to Brazilians, similar to its current offerings in Japan, where it has seven branches and 140,000 account holders.
“Given the expansion of the Brazilian economy, the strengthening of our currency and the surge in investments naturally the large financial conglomerates will have to expand overseas, and I’m not only talking about Banco do Brasil”, said Bendine.
Banco do Brasil has signed a series of agreements with Bradesco, the second largest Brazilian bank regarding credit cards, insurances and a strategic association to expand in Africa, “but with no plans for consolidating both banks”.
“Retail banking competition will continue as tough or even tougher; we are only interested in close links for overseas operations”, added Bendine.
Banco do Brasil moved closer to Bradesco following the consolidation that created the largest private bank in Brazil when Itaú and Unibanco joined.
Bendine said that the bank was considering possible associations with local or international investment banks with the purpose of developing the shares market and creating an area of research and stock trading. A mortgage branch is also included in the plans in association with a major real estate development in Brazil.
Bendine forecasted that retail banking will continue to expand in Brazil in coming years with loans as percentage of GDP reaching 70% by 2015, well above the current 46%.
Banco do Brasil has one branch each in New York and Miami, and an office in Washington. The New York branch focuses on corporate clients and offers private banking, asset-management services and trade finance. The Miami office offers mostly private banking services and trade finance.
In April, Banco do Brasil made its first international acquisition, paying US$ 480 million for a controlling stake in Banco Patagonia SA, Argentina’s third-largest bank by market value.
“Argentina is a priority for us because of the number of corporate clients we have there,” said Bendine Two hundred companies in the corporate client portfolio have operations in Argentina, which also happens to be Brazil’s third-largest trade partner after the U.S. and China.
In Europe, Banco do Brasil is reorganizing its eight units under its subsidiary Banco do Brasil AG in Vienna to cut costs and increase its capacity to generate business, he said.
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