May 17, 2019 / 6:08 PM / 9 days ago

Brazil's Banco Inter considers capital raise - sources

SAO PAULO, May 17 (Reuters) - Brazilian digital lender Banco Inter SA is considering a capital increase with new investors, two sources with knowledge of the matter said.

Inter is in talks to hire as advisors the investment banking units of Banco Bradesco SA and Citigroup. Inter, Bradesco and Citi declined to comment on the matter.

Inter is still deciding whether it will raise capital in a formal share offering or to target a specific new investor that could buy new shares and become a relevant shareholder.

The bank intends to use the capital increase proceeds to boost its business and even make acquisitions.

Inter’s move comes as the number of digital banks rise in Brazil, in a bet that technology may give small lenders a chance of grabbing market share from Brazil’s huge big four banks.

The bank, which had 2 million digital account holders in March, will launch a super app, in an effort to go beyond financial services and enter areas such as entertainment, healthcare and mobility.

In April, Inter received presidential approval to have up to 100% of its capital held by foreigners if needed. The bank is controlled by the Menin family, which holds 57.9% of its capital and also controls homebuilder MRV Engenharia e Participações SA .

Shares in Banco Inter are up nearly 53% this year, trading at 58.7 reais.

Newspaper Estado de S. Paulo reported earlier on Friday that Inter was seeking an investor.

Reporting by Carolina Mandl Editing by Susan Thomas

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