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HSBC adds to Brazilian assets
SAO PAULO, Brazil (Reuters) -- Global banking group HSBC Holdings Plc says it has acquired the asset management business of Bank of America in Brazil. The buy is likely to see HSBC overtake Citibank, Citigroup's commercial banking unit, to become the fourth-largest asset management firm in Brazil behind state bank Banco do Brasil, and private banks Itau and Bradesco. January figures from the Brazilian National Association of Investment Banks show Bank of America has some 2.2 billion reais ($629 million) of assets under management and is 23rd in the country's ranking. HSBC, which entered Brazil in 1997 when it took over ailing Banco Bamerindus, had 20.5 billion reais under management in January and was in fifth place, less than 100 million reais in assets short of fourth-placed Citibank. In late January, Bank of America said it planned to focus on treasury services in the troubled economies of Brazil and Argentina. Bank of America declined comment on the HSBC deal on Monday. HSBC, which is the largest bank in Europe and also has extensive Asian operations, reported last week tha annual pre-tax profit rose 20.6 percent to $9.65 billion, at the bottom end of expectations, as charges for bad debts eased. The transaction in Brazil is the latest in a line of sales by overseas banks which have looked to reduce their exposure to Brazil's turbulent economy. But unlike previous cases, an overseas bank is also the buyer. Currency depreciation"There are various companies buying the asset management (units) of others, but we can't say that this means foreign institutions are starting to invest in Brazil again," said Jose Francisco Cataldo, a bank analyst at Sudameris bank in Sao Paulo. The 35 percent depreciation of Brazil's real currency in 2002, rising interest rates and a slowing economy have seen several foreign banks which were suffering on the home front sell off their asset management wings in recent months. In the past few months, Banco Bilbao Vizcaya Argentaria, Fiat and Germany's HVB Group have sold banking assets in Brazil while IntesaBci has also been trying to sell its Banque Sudameris unit. Copyright 2003 Reuters. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
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