DJ Brazil's Banking Heavyweights Seen Battling For Baneb
By KIERAN GARTLAN
Dow Jones Newswires
SAO PAULO -- The sale of state-owned bank Banco do Estado da Bahia SA,
or Baneb, could generate a heated battle between Brazil's top two
private banks for control of the sector in the northeast of the country,
analysts said.
"The sale has a strong regional importance as well as having attractive
fiscal credit and reserve requirement conditions," said Magali Bim, a
banking sector analyst with Paribas in Sao Paulo.
Baneb, currently managed by the state government of Bahia, has more than
2.1 billion reals ($1=BRR1.6695) in assets. But what's luring bidders is
its 170 branches, all in Bahia state, and more than 390,000 clients.
"Interest is more in Baneb's client portfolio and number of branches
than in its assets," said Joao Pualo Tucci, banking analyst with Banco
Fator in Sao Paulo.
The sale of 100% of the state bank's capital will take place June 22 on
the Rio de Janeiro stock exchange with a minimum asking price of
BRR260.14 million.
Last week, the central bank announced that Banco Bradesco SA (E.BBR),
Brazil's top private bank, and chief competitor Banco Itau SA (E.BIT)
had been pre-qualified to participate in next month's auction. Also
eligible to take part is Banco Bandeirantes, controlled by Portuguese
bank Caixa Geral de Depositos.
Analysts are pointing to Bradesco and Itau as firm favorites to come
away with Baneb.
"Itau have shown themselves to be more aggressive in state bank sales
and buying Baneb would give them the edge in the region," said Paribas'
Bim. Itau purchased Rio de Janeiro state bank Banerj in mid-1997 and,
last September, outbid Bradesco to acquire Minas Gerais state bank Bemge
for BRR583 million, or 86% more than the minimum bid.
However, analysts are saying that Bradesco can never be ruled out.
"Bradesco is unpredictable, their main objective is to be number one in
the sector so you never know how much they are prepared to bid," said
another banking analyst with a major investment bank in Sao Paulo who
preferred not to be named.
The Baneb sale will also include the state bank's subsidiaries Baneb
BTVM, Baneb Leasing SA Arrendamento Mercantil, Baneb Administracao e
Servicos Ltda and Baneb Corretora de Seguros SA.
Paribas' Bim added that the result of the Baneb auction will be a good
indication of what can be expected for the sale of Sao Paulo bank Banco
do Estado de Sao Paulo SA, or Banespa (E.BEP), which she believes could
take place in the third quarter.
"Baneb has regional importance but Banespa has the capacity to change
the sector's overall ranking positions," Bim said.
-By Kieran Gartlan; (5511) 813-1988; kgartlan@ap.org
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