The Brazilian Bank Itaú is almost ready to present a binding bid in order to buy the Citibank’s retail banking operations in Uruguay, which will later turn into a private financial institution in the country according to newspaper, El Observador, citing closed sources associated with the operation.
It seems that the terms of the agreement were closed last week in Uruguay and the only move they are waiting for is ratification from the main offices of both banks as well as further approval in order to make it a formal offer and adjust certain details, cited the same sources. The transaction would imply the transfer of two subsidiaries and 62 employees.
Citi would be mainly interested on closing the operation “as soon as possible,” an operation where the economic details have not been expressed to the media. The American bank is doing a global restructuring plan in order to reduce costs by $1.1 billion per year and a staff reduction of 11,000 jobs, according to what was explained by the bank at the end of 2012.
“Deadlines are not being established. These are complex operations that are going to neglect important details, and not because they have not been done before,” according to the bank’s spokesman who also mentioned that the Central Bank should give its approval taking into consideration that this operation is more than just a simple sale of assets.
If the operation is complete, Itaú would take the lead in front of BBVA placed in second place and behind, to another Spanish bank, Banco Santander in terms of business volume among the private banking institutions. Santander was the leader of the private banking segment with 29.2% of the market, considering business volume, and later followed by BBVA with 17.7% according to the data from the Central Bank. Itaú was placed in third with 17.5%.
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