Itau in Talks to Buy Citigroup Brazil Unit

SÃ O PAULO—Brazilian banking giant Itau Unibanco Holding SA said it is in talks to acquire Citigroup Inc.'s consumer-banking operations in Brazil.

However, Itau said it hasn't signed any contract regarding the acquisition, and it didn't provided further information. Itau's statement came after local media reported that Itau and Citi were in exclusive talks regarding a deal.

Citigroup in February said it was planning to sell its consumer operations in Brazil, Argentina and Colombia.

Earlier this year, the head of Banco Santander Brasil, the Brazilian unit of Spain's Banco Santander SA, said the Spanish bank was interested in Citi's operation in Brazil.

Citi has long struggled to compete in Brazil, even during the economic and lending boom that preceded the current recession, because of high costs associated with operating in the South American country and what insiders have called a weak strategy for dealing with the country's compliance quirks.

Brazil's banking industry is highly concentrated among five banks: Itau; Banco Bradesco SA; Santander; and government-owned giants Banco do Brasil SA and Caixa Economica Federal. Together they control almost 70% of the assets in the Brazilian financial system.

Citi's business in Brazil has just 1% of the financial system's assets, according to central-bank figures.

Write to Rogerio Jelmayer at [e-mail]

(END) Dow Jones Newswires

September 22, 2016 07:25 ET (11:25 GMT)

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