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Exclusive: Banco do Brasil eyes U.S., Latin takeovers: CEO
SAO PAULO |
SAO PAULO (Reuters) - Banco do Brasil (BBAS3.SA), Latin America's largest bank by assets, may seek acquisitions in the United States, looking to benefit from "devalued" prices among regional lenders, Chief Executive Aldemir Bendine said in an interview.
The state-controlled bank is also on the lookout for targets in Argentina, Chile and other Latin American countries as part of an "internationalization" drive, Bendine told Reuters late on Thursday.
"There are some countries where we don't see the need for takeovers, but possibly the strongest move will happen through acquisitions," Bendine said.
"Having gone through the most acute period of the global crisis, many assets have been devalued ... so you have takeover opportunities in countries where we see very good opportunities at the moment."
Banco do Brasil is awaiting approval from the U.S. Federal Reserve to become a Financial Holding Company and offer a broad range of products and services, but the takeover of a bank with a regional presence would help it expand faster. The bank expects international business to account for 10 percent of profit in the medium term, from very little now.
Bendine said the bank will focus its U.S. retail presence on Florida, Massachusetts, New Jersey and other states with a large community of Brazilians and Latinos. Banco do Brasil is eyeing the U.S. business of European banks among possible targets, he added.
In Brazil, the bank is considering takeovers of local brokerages and asset managers to benefit from an expected boom in stock investment by individuals in the coming years.
"Many things could happen in the brokerage segment. It's a market where the bank has a lot of room to work," Bendine said.
Banco do Brasil shares were up 0.4 percent at 30.32 reais in early afternoon trade in Sao Paulo, compared with a rise of 0.6 percent in the benchmark Bovespa index .BVSP. The stock has more than doubled in price so far in 2009, outstripping the Bovespa's 77 percent increase.
The bank's level 1 American Depositary Receipts will begin trading on December 2 in New York, Bendine said. The bank received approval by the U.S. Securities and Exchange Commission two weeks ago to issue ADRs as it looks to increase its visibility to overseas investors and boost liquidity.
Banco do Brasil has started talks with the National Treasury over a capitalization plan that may include a primary and secondary share offering and the sale of subordinated bonds and hybrid securities, Bendine said.
"The bank's capital structure is not adequate nowadays," he added. "Talks with our controlling shareholder have already started, but we are going with no rush."
The bank had a Basel solvency ratio of 13 percent at the end of the third quarter and Bendine said he aims to boost that to 15 percent.
Banco do Brasil has raised nearly 840 million reais ($482 million) for a fund to invest in Brazilian agribusiness. Brazil, which ranks among world's largest producers of soybeans, sugar, coffee, beef, orange juice and other top commodities, may see a boom in overseas investments in agriculture in coming years, Bendine said.
"We see enormous opportunities in these agribusiness funds in a short space of time, as soon as we begin structuring more of them," he added.
(Reporting by Elzio Barreto and Aluisio Alves, editing by Matthew Lewis)
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