A Bad Case of Indigestion

A Bad Case of Indigestion

M&A

As its new Brazilian adventure unfolds, Banco Santander Central Hispano may be wondering what it was thinking when it paid $3.55 billion for a 30% controlling stake in Banespa, the former São Paulo state bank. Deposits are leaking, account holders are heading for the door and the scale of Banespa's potential bad debts has led to an unexpectedly large write down of asset value. Brazil represents a mammoth market for foreign banks. Fewer than half the country's 110 million adults have bank accounts. To make matters worse, the acquisition has all the makings of another case of foreign

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