Italian bank Banca Nazionale del Lavoro (BNL) will exit
The decision is part of BNL’s strategy to shed non-strategic assets to improve its performance, which was hurt by the crisis in Argentina and market volatility in Brazil last year. Besides Banco BNL do Brasil, the Italian bank has subsidiaries in Argentina and Uruguay.
BNL has made a good decision because it will reduce its risk-profile, Standard & Poor’s banking analyst in Milan, Bernard De Delonjevialle believes. BNL’s Latin American exposure was the sole reason why S&P changed BNL’s long-term foreign currency outlook in February last year from stable to negative.
BNL do Brasil is well-run and profitable, but a bank like BNL with weak capitalisation and low profitability is better served by reducing its risk-profile given last year’s market volatility in Brazil and the uncertain outlook, he claims.
The exit will not prompt an improvement in BNL’s rating as the Brazilian assets are not a significant part of its overall asset base and the bank took steps last year to reduce its exposure to Brazil, Delonjevialle notes.
Italian bank IntesaBci is also looking to sell its Brazilian franchise and exit the rest of Latin America. However, last year negotiations to sell its Brazilian subsidiary to local bank Itau failed on disputes over price and there have been no new announcements regarding Brazil or the other Latin American markets where IntesaBci has a presence through its Sudameris banking franchise.
Delonjevialle is not surprised that IntesaBci’s exit is taking so long because it will not dispose of its Latin American assets at any price. IntesaBci is Italy’s largest financial group and has the financial muscle to take its time to look around for the best buyers, he says, adding IntesaBci will probably make some announcements this year regarding the sale of its banking subsidiaries in the region.