Development: On 3 August HSBC Plc announced that it had sold its Brazilian division to Bradesco for US$5.2bn.
Significance: By purchasing HSBC, Bradesco now rivals Itaú Unibanco as the largest bank in Brazil. Its assets are now valued at R$1.193trn (US$348bn), compared with R$1.295trn for Itaú. Taking over HSBC means that Bradesco has taken on 5m extra customers, R$168bn in assets, and 851 bank branches in 529 cities across the country. HSBC, which is shifting resources to Asian markets, will continue to maintain a small presence in Brazil to attend to its business clients.
- According to the press release from HSBC, the two reached agreement on 31 July, and the weekend was spent hammering out the details. The price tag was above market expectations of US$4bn.
- In its own statement, Bradesco said that the purchase would make possible “economies of scale and platform optimisation, with wider national coverage, consolidating its leadership in a number of bank branches in several states, as well as reinforcing its presence among the high-net worth sector”.
Looking Ahead: Brazil’s banking sector is proving resilient even as the domestic economy faces a recession, high inflation and a weakening currency. Bradesco announced last week that it earned R$4.5bn in the second quarter, its best quarterly results ever.
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