* Itaú, Bradesco to earn fees close to Banco do Brasil's
* BB Seguridade may be largest Brazil IPO this year
* Banco do Brasil has struggled to build investment bank
SAO PAULO, Feb 27 State-run Banco do Brasil SA
will have to split the lion's share of proceeds from
advising on the initial public offering of its insurance unit
with its fiercest local rivals, which have more sophisticated
Itaú Unibanco Holding SA and Banco Bradesco SA
will each earn 17 percent of the pool of fees for the
IPO of BB Seguridade Participações SA, compared with a 17.50
percent take for Banco do Brasil's investment bank, known as BB
Investimentos, according to a prospectus for the transaction
published on Wednesday.
Foreign and local banks are betting that advisory services
for IPOs and mergers and acquisitions will be a stable source of
revenue now that record-low interest rates are hampering
revenue. Bankers told Reuters the BB Seguridade deal, which may
happen by April, could fetch at least 5 billion reais ($2.5
billion) - making it the largest IPO planned for Brazil this
For years, Banco do Brasil has failed to build up a
wholesale bank to help support Brazil's largest lender in its
bid to increase corporate lending. In contrast, Itaú's purchase
of Banco BBA Creditanstalt in 2002 and Bradesco's creation of
Bradesco BBI in 2006 allowed both private-sector lenders to vie
with foreign investment banks for lucrative mergers and capital
markets advisory deals in Brazil.
Last year, Itaú BBA, Itaú's investment bank, became the No.
1 manager of global debt sales by Brazil's government and
companies - the highest ranking for a local firm since Thomson
Reuters began tracking the data in 2010.
Itaú BBA was ranked second in Thomson Reuters' annual
mergers and acquisitions deal-making report for Brazil, behind
Credit Suisse Group. Bradesco BBI was ninth.
JPMorgan Chase & Co, which BB Seguridade hired as
global co-manager for the sale, will earn 17.50 percent of the
fee pool, the prospectus said. BTG Pactual Group,
Citigroup Inc and São Paulo-based Brasil Plural Banco
Multiplo will be paid a share of 8.50 percent each, while Banco
Votorantim SA will get 5.50 percent of total fees.
According to the prospectus, banks could change the current
arrangement for fee payouts by common agreement.
Banco do Brasil may sell as much as 40 percent of BB
Seguridade to investors. The filing did not give details of the
size of the deal, the number of shares on offer or a timetable
for the transaction.