Bloomberg News

UBS May Purchase Brazilian Lender as Banking License Stalls

February 01, 2012

(Updates with examples of consolidation in seventh and eighth paragraphs.)

Jan. 31 (Bloomberg) -- UBS AG, which sold its Brazilian lending unit in 2009, may purchase another as it steps up efforts to restart an investment-banking business in the country, a person familiar with the company’s plans said.

The company, based in Zurich, has sought a Brazil license for the past two years to open its own business trading stocks and bonds, investing proprietary funds, and offering derivatives and syndicated loans, according to the person, who asked not to be named because the matter is private. Regulators haven’t granted permission as they try to spur larger banks to purchase smaller ones with existing licenses instead.

UBS sold its Pactual bank unit to billionaire Andre Esteves, the former head of the business, for $2.5 billion in 2009, less than three years after buying it. The Swiss company still has a private bank and a mergers-and-acquisitions business in Brazil, with more than 200 workers.

UBS, Switzerland’s biggest lender, agreed in April 2010 to buy Brazil brokerage Link Investimentos, and still hasn’t received approval from the central bank for the deal, according to the person, who declined to name potential bank acquisition targets.

“There could be newcomers seeing an acquisition as a way to speed up the process of entering the market,” Anthero Meirelles, the central bank director, said in an interview in May.

A spokesman for UBS declined to comment on the company’s Brazil strategy.

Fewer Options

Small banks’ financing options in Brazil narrowed when the market for selling loan portfolios dried up in 2010 following an accounting-fraud probe linked to the practice at Banco Panamericano SA. Banco BTG Pactual SA, founded by Esteves, purchased Panamericano for 450 million reais in January after the FGC, the nation’s guarantee deposit bank, agreed to extend a credit line to the bank to cover Panamericano’s losses.

In April FGC funded the acquisition of Banco Schahin SA by Banco BMG SA, a lender focused on payroll-deductible loans. The FGC also financed the purchase of Banco Matone SA by J&F Participacoes SA, the holding company for beef exporter JBS SA. It merged the lender with Banco JBS SA to create Banco Original. On Dec. 27, Banco Cruzeiro do Sul agreed to acquire control of Banco Prosper SA.

--Editors: Steve Dickson, William Ahearn

To contact the reporter on this story: Cristiane Lucchesi in Sao Paulo at

To contact the editor responsible for this story: David Scheer at

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