UPDATE 2-Brazil's Bradesco enters Mexico, betting on retail

* Bradesco to enter Mexico retail with Ibi takeover

* Bank sees "enormous potential" in Mexico consumer credit

* Bradesco to focus on insurance, consumer finance
(Recasts first sentence, adds comments by Bradesco executive,
details of transaction)

By Elzio Barreto

SAO PAULO, Jan 22 (Reuters) - Banco Bradesco, Brazil's
second-largest private-sector bank, said on Friday it agreed to
buy Mexican bank Ibi Mexico for an undisclosed sum, marking its
first international foray in retail banking as it seeks to take
advantage of rising credit demand.

Bradesco (BBDC4.SA)(BBD.N) signed a memorandum of
understanding with Ibi's parent, Cofra Holding AG, the
Swiss-based holding company that also owns the C&A clothing
retail chain, and expects the cash transaction to be completed
by March 30.

The takeover of Ibi Mexico is an extension of an agreement
between Bradesco and Cofra signed last year, when the Brazilian
bank bought Ibi's business in Brazil for 1.4 billion reais
($766.7 million) in stock. Ibi operates mostly inside C&A
stores, offering credit card and consumer finance services.

"If we consider the size of the market, obviously Mexico is
an extremely important market," said Marcelo Noronha, head of
Bradesco's credit card business, in a conference call with
reporters.

"Mexico and Brazil are the two main economies in Latin
America. Obviously there is enormous potential in that market,
the consumer finance market," he added.

As part of the agreement, Bradesco will have exclusive
rights for 20 years to offer financial products and services in
C&A's 50 stores in Mexico.

Ibi Mexico has a loan book totaling 1.3 billion pesos
($100.08 million) and more than 1 million credit card clients,
Bradesco said. Noronha said the bank will focus on consumer
finance and insurance as it expands in Mexico.

The transaction still requires the approval of the relevant
Mexican and Brazilian authorities.

Bradesco shares traded flat in early afternoon trade in Sao
Paulo, compared with a 0.7 percent drop in the benchmark
Bovespa index .BVSP.
($1=1.826 reais)
($1=12.9889 pesos)
(Reporting by Elzio Barreto, editing by Matthew Lewis)