11/04/2008 15h03
Itaú-Unibanco merger strengths sector in crisis
Gazeta Mercantil - 11/04/2008
This Monday the Brazilian market witnessed the birth of the biggest private financial conglomerate of the Southern Hemisphere and one of the 20th biggest ones in the world, resulting from the merger between two sector's heavyweights: Itaú and Unibanco banks. The institutions announced the signature of a contract that will lead to the merger of the institutions. The plans of the presidents of Itaú, Roberto Setubal, and of Unibanco, Pedro Moreira Salles, are daring. The idea is to transform the new group into a world competitor in five years' time. The conversations for the merger, however, were only intensified after the advances of the competitors, more precisely of Spanish Santander. "For the first time a kind of competitor with large scale, both globally and locally, was formed in the Country and we started wondering what to do to face this new reality", affirmed Moreira Salles. The merger was considered a great move not only for the two institutions, but also for the financial sector. In spite of the greater concentration, specialists say the competition with other large players such as Bradesco and Banco do Brasil bank gets even fiercer. With total assets of R$ 575.1 billion (US$ 261.4 billion) and net equity of R$ 57.7 billion (US$ 26.2 billion), Itaú-Unibanco bank becomes the biggest bank of the Country, with a considerable difference (36% more in assets and 57.7% in net equity) compared to Bradesco. In the branch of insurance, Bradesco will not lose its leadership to the superbank, which will remain in the second place. Unibanco reinforced again its interest in acquiring AIG's participation in the Country.
