Brazil Banks Bulk up

Dec 1, 2008

Brazil’s banking hierarchy is upended by the Itaú-Unibanco merger and Banco do Brasil’s aggressive shopping spree. Underdog Bradesco evaluates its options.

by Dan Shirai The big secret shared by Roberto Setubal and Pedro Moreira Salles could not have been unveiled in a more elegant way. The CEOs and controlling family figureheads of Itaú and Unibanco, respectively, say they had been in talks for 15 months before anyone beyond an inner-most circle of advisers had an inkling about the union, announced on November 3. The up to 26 billion reais deal is set to create LatAm’s biggest bank by assets and the ninth largest in the Western hemisphere, according to Economatica. “For the first time we were faced with a foreign competitor that was bigger in scale and capital than Unibanco, and the same size as Itaú,” writes Salles, referring to Santander, in a memo sent to Unibanco employees on the day Itaú-Unibanco was announced. He and Setubal began in July 2007 a series of secret meetings to discuss...

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