Asset Consolidation Seen at Brazilian Banks

Larger Brazilian banks will likely continue purchasing assets, particularly loans, from smaller banks, says Peter Shaw, MD at Fitch. “We’re likely to see acquisition of assets, though not acquisition of franchises,” Shaw tells investors at a Brazilian Chamber of Commerce panel in New York. He emphasizes that he does not expect the financial crisis to bring a round of consolidation among banks, as in the past. Rather, the larger banks will continue purchasing loan packages from small and medium-sized banks. Banco do Brasil has bought some BRL1.5bn in loan portfolios in the last 18 months, it said earlier this month, and plans to buy up to BRL3bn more. Banco Bradesco CEO Marcio Cypriano said in a Monday teleconference, according to local and wire reports, that he expects no significant merger and acquisition activity among Brazilian banks in the near future, but that his will look to buy portfolios from smaller shops.