Latam bank exodus risks entrenching local heavies

Banco Bradesco

10/10/2016 21:17

(The author is a Reuters Breakingviews columnist.  The opinions 
expressed are her own.) 
    By Sara Silver 
    NEW YORK, Oct 10 (Reuters Breakingviews) - Global firms Citi 
and HSBC are protecting shareholders and dividends by selling 
second-tier units in Brazil and Argentina. That's too bad for 
the markets they exit. As incumbents Itaú, Bradesco and 
Santander do the buying, their dominance increases, but 
competition suffers. 
         
    Full view will be published shortly. 
    On Twitter https://twitter.com/SilverSara7 
          
    CONTEXT NEWS  
    - Citigroup on Oct. 8 announced it would sell its 
retail-banking and credit-card business in Brazil to Itaú 
Unibanco for 710 million reais ($220 million), transferring its 
71 branches as well as about 35 billion reais in deposits and 
assets under management in Brazil. Banco Santander agreed on 
Oct. 9 to buy Citi's Argentina unit for an undisclosed amount. 
    - Citi, which derives most of its revenue its home U.S. 
market, announced on Oct. 4 that it would expand its retail 
operations in Mexico, investing $1 billion to update its 
branches, technology, products, services and risk management, to 
serve Mexico's growing middle class. 
    - The New York-based bank has been exiting consumer banking 
across Latin America and other regions as it seeks to simplify 
its operations and cut costs and risk. It has announced its 
departure from other Latin American markets including Peru, 
Costa Rica, and Colombia. 
    - For previous columns by the author, Reuters customers can 
click on  SILVER/  
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    <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ 
Itaú to pay $220 mln for Citigroup's Brazil assets    
 urn:newsml:reuters.com:*:nL2N1CE09H 
Bradesco wins Brazil approval for $5.2 bln purchase of HSBC unit 
    urn:newsml:reuters.com:*:nL1N1901AF 
BREAKINGVIEWS-U.S. companies pick Mexico's reality over Trump's  
   urn:newsml:reuters.com:*:nL2N1CB1NO 
BREAKINGVIEWS-Santander sprawl contains more ladders than snakes 
    urn:newsml:reuters.com:*:nL4N1AD3GD 
    ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> 
 (Editing by Antony Currie and Martin Langfield) 
 ((sara.silver@thomsonreuters.com;)(Reuters 
Messaging:)(sara.silver.thomsonreuters.com@reuters.net)) 
 
Keywords: CITIBANK BRASIL M&A/BREAKINGVIEWS