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  • Spain ‘s BBVA has sold its subsidiary BBV Brasil to Brazilian banking giant Bradesco for R2bn (US$600mn) in cash, plus a 4.5% stake in Bradesco worth about R630mn.

    “We bought a bank with a R2.45bn net worth for R2.63bn. It was a good price for an increase in the number of clients and branches,” Bradesco CEO Marcio Cypriano says.

    “BBVA’s global aim is to have at least 20% market share wherever they operate. This would be too difficult to attain here, given concentration and tight competition. With the deal they will have a 4.5% stake in the country’s largest private bank,” he adds.

    Under the terms of the deal, Bradesco will acquire all of BBVA’s assets in Brazil, including asset management, credit card, financing, investment, brokering, real-estate and leasing operations.

    The Spanish financial group will also have the right to appoint one member of Bradesco’s board, and Bradesco will create a “Spanish desk” to take care of BBVA’s Spanish corporate clients in Brazil. Bradesco already has a Portuguese desk and Japanese desk.

    The deal will boost Bradesco’s asset base 12% to R157bn, giving it a comfortable lead over its closest private sector rival Itau, which has assets of R123bn. Federal bank Banco do Brasil will continue to dominate the local banking system in terms of sheer size, with assets of R214bn.

    BBVA’s Brazil operation will also add 1.3 million clients to Bradesco’s current client base of 13 million. The number of Bradesco branches will also increase 15% to 3,366 with the incorporation of BBVA’s 438 branches in the country.