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UPDATE 3-Santander Brasil CEO says offer for HSBC unit 'very good'
July 30, 2015 / 11:49 AM / in 2 years

UPDATE 3-Santander Brasil CEO says offer for HSBC unit 'very good'

(Adds comments from Bradesco CEO in paragraph 3)

By Guillermo Parra-Bernal and Aluísio Alves

SAO PAULO, July 30 (Reuters) - Banco Santander Brasil SA, the largest overseas bank doing business in Brazil, remains interested in acquiring the local unit of HSBC Holdings Plc , and has presented a “competitive” offer for it, Chief Executive Officer Jesús Zabalza said on Thursday.

The run-up to the sale of HSBC Bank Brasil SA Banco Múltiplo, as the unit is known, has gathered momentum since the plans were first made public in May. Earlier this month, Reuters reported that rival Banco Bradesco SA, Brazil’s No. 2 private-sector bank, had began exclusive talks to acquire the unit.

A source with knowledge of the situation said at the time that the Bradesco bid valued HSBC Brasil at about 12 billion reais ($3.56 billion), or 1.2 times book value. Earlier on Thursday, Bradesco CEO Luiz Carlos Trabuco declined comment on the bank’s bid for HSBC Brasil.

Zabalza did not elaborate on Santander Brasil’s offer for HSBC Brasil. He said Santander Brasil “remains in the dispute” for the unit. He refused to answer questions about whether Bradesco was exclusively negotiating for HSBC Brasil.

HSBC’s exit from Brazil comes as large local lenders outperform smaller rivals and gain more muscle to ride out Brazil’s deteriorating economy.

“All I can tell you is that we’re very interested, the offer we made was a very good one,” Zabalza said on a conference call to discuss second-quarter earnings. “We’ll only write off our chances when the process is over.”

Zabalza’s remarks underscore the appeal of adding assets to Santander Brasil’s platform to narrow the gap with larger rivals. However, he reasserted that Santander Brasil’s focus is to grow organically as Brazil’s economy sags.

Units of Santander Brasil, the lender’s most widely traded class of stock, shed 2.6 percent to 15.68 reais following Zabalza’s remarks about HSBC.

A successful bid for the HSBC unit could distract Santander Brasil from a reorganization plan including boosting returns and grabbing market share after years of underperformance.

Profit at Santander Brasil SA topped estimates in the second quarter as a jump in interest income helped offset the impact of rising expenses and declining loan disbursements.

The local unit of Spain’s Banco Santander SA earned 1.68 billion reais in recurring profit for the quarter, beating an estimate of 1.45 billion reais in a Reuters poll. Recurring profit, which excludes one-time items, rose 2.6 percent and 16.6 percent on a quarterly and annual basis.

$1 = 3.3262 Brazilian reais Reporting by Guillermo Parra-Bernal and Aluísio Alves; Editing by Bill Rigby

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