Thursday, 8 January 2009

Banco do Brasil DENIES (Again the Magic Word) Holding Votorantim Talks. Let's Guess What Happened!

Today, Banco do Brasil CEO Antonio Lima Neto denied that the lender is in talks to buy rivals (click here for link to Reuters's story.) Banco do Brasil is in no rush to take over rivals, Lima Neto said (probably at a press conference.) ''There are no negotiations under way,´´ the under-fire executive said when asked about it, according to Reuters.

For months, there's been speculation that BB was negotiating a partial or total acquisition of Banco Votorantim's businesses (I heard in November from a good source in São Paulo that they were interested in Votorantim's BV Financeira, a consumer financing company specialised in auto and personal loans.) Folha de S. Paulo today said that taxpayers (ehhmm, sorry, Banco do Brasil) were to spend up to 7 billion reais in the transaction. Thank God Mr. Antonio Ermirio de Moraes (photo, the head of the family that own Votorantim) is in no way interested in seeing Lula and his hungry party comrades scouring for money and posts for their political cronies, or meddling into the group's affairs.

Following the Itau decision to buy Unibanco, private banks grew more conscious of the awful power that the Brazilian government had in their industry. The Itau-Unibanco merger will create Brazil's biggest bank and end more than 200 years of dominance of the domestic market by BB -- that irritated Lula, according to the main newspapers in Brazil. Banco do Brasil can do better by buying lousy-run state banks, and spending billions of reais of taxpayers' money doing bad businesses. While talk that other targets remain being Banco Safra and a number of smaller rivals, it is unlikely that Banco do Brasil buys a rival of importance in coming months.

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