Business & Banking

IntesaBci Cedes Control of Argentine Subsidiary

IntesaBci, Italy's largest bank, is spending $150 million to recapitalize its Argentine unit and then cede control of it in a merger with Banco Patagonia SA, a local lender in southern Argentina. The Italian bank will retain a minority stake in the merged company, that will include Banco Sudameris Argentina's $584 million of assets and 99 branches along with Banco Patagonia's 289 million pesos of assets and about 30 branches. UBS Warburg advised the Milan-based IntesaBci on the transaction. The bank is divesting from Argentina and Brazil as well as cutting as many as 8,000 jobs as it tries to regain profitability after suffering losses in the second quarter. IntesaBci acquired its Latin American unit, Sudameris, when it bought Banca Commerciale Italiana in 1999. France's Crédit Agricole and Canada's Scotiabank cut their losses in Argentina by walking away from their operations there following the government's default last year and the January currency devaluation. In March, IntesaBci agreed to sell its Brazilian unit...