Santander Brazil Mulls Buying HSBC Unit

SÃO PAULO-—The Brazilian unit of Spanish bank Banco Santander SA will study the possible acquisition of HSBC Holding PLC's assets in the South American country.

"We can't speak for HSBC Brazil, but there's a very initial process for the sale of the bank (in Brazil) that we're going to analyze," said Jesús Zabalza, chief executive of Banco Santander (Brasil) SA at a press conference Tuesday. "We haven't made an offer, we haven't even opened a data room for this operation."

The Wall Street Journal Reported in April that HSBC had hired advisers to pitch the sale of a large chunk of its Brazilian unit to prospective buyers, citing people familiar with the matter.

HSBC runs the seventh-largest bank in Brazil, with a 2.7% market share, in terms of assets. HSBC Brazil swung to a loss of around £200 million ($306.8 million) in 2014. It is unclear how much of the Brazil unit, which employs 21,000 people, might be up for sale.

HSBC's Latin America division, which also includes Mexico and Argentina, suffered a difficult 2014, with adjusted profit before tax dropping 50% as the Brazilian economy slowed. Meanwhile, costs rose in the region, impacted by union-agreed salary increases and inflation.

HSBC declined to comment.

Max Colchester contributed to this article.

Write to Rogerio Jelmayer at [e-mail]

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