Bloomberg News

Banco do Brasil May Acquire Lenders in Colombia, Peru, Chile

June 15, 2011

(Updates with closing shares in sixth paragraph.)

June 15 (Bloomberg) -- Banco do Brasil SA, Latin America’s biggest bank by assets, is considering buying lenders in Colombia, Peru and Chile to attract corporate clients and increase business with Brazilian companies in the region.

“We are interested in having a relevant presence in markets other than Brazil,” Allan Toledo, the company’s international, private banking and wholesale vice president, said yesterday in a phone interview.

Banco do Brasil is taking advantage of economic growth in the region and the globalization of Brazilian companies to expand in countries where Brazil has strong trade ties. The IMF forecasts 4.7 percent growth in Latin America this year, down from 6.1 percent in 2010. Argentina, Chile and Peru may grow the fastest, with Peru’s gross domestic product expanding 7.5 percent after last year’s 8.8 percent, the International Monetary Fund said.

Profit has expanded at Banco do Brasil as improving unemployment and rising consumer demand fueled loan expansion. The Brasilia-based lender’s first-quarter profit rose 42 percent to 2.92 billion reais ($1.8 billion), the bank said on May 10.

In Chile, Banco do Brasil is still interested in buying a stake in Corpbanca, the Andean nation’s sixth-largest lender, Toledo said. He added that there are other possibilities in Chile, though assets are more expensive than others in the region and will require more negotiations.

Biggest Gainer

Corpbanca was the biggest gainer on Chile’s benchmark stock index today, rising 2.15 percent to 7.46 pesos. The IPSA fell 1.6 percent to 4,572.09 at 5:28 p.m. New York time. Banco do Brasil slipped 0.14 percent to 27.60, while Brazil’s benchmark Bovespa index fell 0.97 percent to 61,603.74.

Colombia is a “very interesting market” because of the country’s population of more than 40 million and prospects for economic expansion, he said. Banco do Brasil is also expanding in the U.S., home to about 1.5 million Brazilians. The bank in April agreed to buy Florida-based EuroBank for $6 million.

Banco do Brasil plans to invest $25 million in the U.S. to open 20 branches within five years, and may make acquisitions to reach that target, Toledo said on April 25. The bank is looking to have 400,000 customers in the U.S. within five years, up from about 15,000 at EuroBank currently, Toledo said.

In April 2010, the bank made its first international acquisition, paying $480 million for a controlling stake in Banco Patagonia SA, Argentina’s third-largest bank by market value. The lender plans to add about 70 branches to Patagonia’s network over four years.

Credit for companies at Patagonia jumped 77 percent to $1.5 billion over the past 12 months as Banco do Brasil works to turn all Brazilian firms operating in Argentina into Patagonia clients. They include: Odebrecht SA, the Brazilian construction company that’s the largest in Argentina, and Loma Negra Compania Industrial Argentina, the biggest cement maker in the country, owned by Brazil’s Camargo Correa SA.

--Editors: Dan Reichl, Peter Eichenbaum

To contact the reporter on this story: Adriana Brasileiro in Rio de Janeiro at abrasileiro@bloomberg.net

To contact the editor responsible for this story: Francisco Marcelino at mdeoliveira@bloomberg.net


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