Monday, 19 January 2009

Citigroup Denies Again Plans to Sell Brazilian Unit. But Rumours About a Divestiture Abound.

There are rumours in the marketplace that Brazilian banks and foreign lenders are pitching offers for Citigroup's Brazilian unit. And the more Citigroup does to deny those rumours, the stronger they come. Citi has about 90 billion reais of assets in Brazil, if you add the retail banking operations (40-50 billion reais,) the consumer finance company (which is badly wanted by rivals including Banco Bradesco,) and the asset management unit, which administers about 25 billion reais in assets.

Rumours on Friday were that
1) Bradesco was to bid for the consumer finance operations; 2) that Santander was interested in the operation (crazy, they haven't even finished the integration with ABN Amro,) and; 3) that a major European lender would be willing to pay cash and swap assets. In the wake of the Citi-Nikko news in Japan (click on this link to understand what I am talking about here,) the Citi guys are surely gauging every option -- summarising, not only they remain open to listen to any offer, but also they don't care about shedding valuable assets if the money offered for these is considerable.

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