Banco do Brasil, Bradesco in Citigroup venture talks: source

The logo of Brazilian Bradesco bank is seen on a branch in Osasco financial centre, Brazil, August 3, 2015. REUTERS/Paulo Whitaker

SAO PAULO (Reuters) - Brazilian lenders Banco Bradesco BBDC4.SA and Banco do Brasil BBAS3.SA are in talks to buy Citigroup's C.N stake in a credit card processing joint venture with Elavon Inc, a source with knowledge of the negotiations said on Saturday.

The acquisition could be closed next month by Bradesco and Banco do Brasil’s holding company Elo Participações, the source said, asking not to be named because the discussions are confidential.

Representatives for Bradesco, Banco do Brasil and Citigroup declined to comment on the talks, which were first reported in Saturday’s edition of Estado de S.Paulo. The newspaper did not say how it got the information.

Reuters reported in November that Citigroup had put the stake up for sale after Brazil’s central bank said the joint venture needed more cash and the U.S. bank declined to come up with any additional funds.

Citigroup owns 49.9 percent of the Elavon do Brasil venture, which had negative equity of 195 million reais ($49 million) as of June, according to Citigroup’s Brazilian financial statements, meaning the bank could lose money if it tried to sell the stake.

Bradesco and Banco do Brasil are controlling shareholders of Cielo SA CIEL3.SA, Brazil's No. 1 card payment processor.

Reporting by Aluisio Alves; Writing and additional reporting by Brad Haynes; Editing by Helen Popper