Brazil approves Bradesco's purchase of HSBC local unit (updated)

Banco Bradesco

08/06/2016 18:29

(Adds details on conditions attached to approval, background on 
Bradesco and Brazil market) 
    By Leonardo Goy and Guillermo Parra-Bernal 
    BRASILIA/SAO PAULO, June 8 (Reuters) - Brazil's antitrust 
watchdog, Cade, approved on Wednesday Banco Bradesco SA's 
purchase of HSBC Holdings Plc's  HSBA.L  local unit under some 
conditions, marking the latest departure of a foreign lender 
from one of the world's most concentrated banking markets. 
    Five members of Cade's board voted to pass the deal as long 
as Bradesco  BBDC4.SA , the country's No. 3 listed bank, agrees 
to refrain from making any rival acquisitions for at least 30 
months. The remaining two board members did not cast ballots. 
    After sitting on the sidelines for years while local rivals 
bulked up through takeovers, Bradesco made a grab for HSBC Bank 
Brasil Banco Múltiplo SA last August. The $5.2 billion purchase 
allowed Bradesco to increase assets by 16 percent and add 5 
million clients.  urn:newsml:reuters.com:*:nL1N10E146 
    The transaction should help Bradesco cut the gap with 
state-controlled lenders Banco do Brasil SA and Caixa Econômica 
Federal and private-sector rival Itaú Unibanco Holding SA, 
Brazil's top three banks by assets. Consumer groups have warned, 
however, that the deal could hamper competition in a market 
where the top 10 banks control 90 percent of the industry's 
assets. 
    Analysts and investors have said the acquisition, the 
largest in Bradesco's 74-year history, will test Chief Executive 
Officer Luiz Carlos Trabuco's ability to absorb large asset 
management, banking and insurance assets at a time when the 
economy is headed for the most serious recession in eight 
decades. 
    Nonvoting shares, Bradesco's most widely traded class of 
stock, accelerated gains on Wednesday after Brasilia-based Cade 
approved the transaction. The shares were up 2.8 percent at 
24.93 reais, the highest level since May 20. 
    
 
 (Additional reporting by Lawrence White in London; Editing by 
Matthew Lewis) 
 ((guillermo.parra@thomsonreuters.com)(+55-11-5644-7714)(+55-119 
-8346-7153)(Reuters Messaging: 
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Keywords: HSBC BANK BRASIL M&A/BANCO BRADESCO ANTITRUST (UPD