Itaú Gains Two Kinds of Capital
By buying local competitor BBA Creditanstalt, Brazil's
second-largest private sector bank substantially grows its assets
and gains the talent inside a well-run wholesale
Brazil's banking sector entered a new phase of consolidation
in November when Banco Itaú bought a 95.75% stake in
Banco BBA Creditanstalt, including the 47.79% stake owned by
Germany's HVB Group, for R$3.275 billion ($897.5 million).
Banco Itaú is the second- largest private sector bank in
Brazil and its acquisition of BBA enlarges its assets by 21% to
R$120 billion ($33.6 billion). It also becomes the country's
best capitalized bank, with a risk adjusted capital ratio of
18.4%. International banks, hit hard by losses in Argentina and
weak third-quarter earnings results, are retreating from Latin
America. Roberto Setúbal, president of Banco
Itaú, says their departure presents an opportunity for
Banco Itaú to consolidate its presence in the Brazilian
BBA's wholesale banking franchise complements Itaú's
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