Thursday, 15 January 2009

We Hear Insistent Rumours Over the Acquisition of BicBanco by Bradesco. Takeover War in Brazil Banking Sector Far From Over!

We hear that BicBanco, a mid-sized bank specialised in consumer and middle-market lending, is up 14 percent in São Paulo on speculation it is a takeover target by Banco Bradesco SA. The day the Votorantim deal was announced, this blog said possible transactions would include a BicBanco purchase (click here to see that I am not lying.)

BicBanco peers such as Banco Cruzeiro do Sul, which allegedly went through funding problems amidst the crisis in October, or ParanaBanco, whose incursion into paycheck-deductible lending has been quite successful, may also be targets of takeovers. Because funding dried up in the wake of the credit crisis, some of these institutions ran short of gas to continue expanding (gas = borrowing as opposed to own capital resources.) Some of them have begun to sell their loan portfolios to bigger rivals and are giving up growing. Consolidation is the name of the banking game in Brazil these days.

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