BicBanco Shares Surge After Report of Sale Negotiations

Banco Industrial & Comercial SA surged as much as 16 percent, the biggest intraday gain since 2009, after a report that the company was in sale talks with competitors including Itau Unibanco Holding SA.

BicBanco, as the lender is known, rose 11 percent to 4.95 reais at 12:25 p.m in Sao Paulo after rising as high as 5.18 reais earlier today. The benchmark Ibovespa index was little changed.

Sale talks are under way between BicBanco, a Sao Paulo-based lender that focuses on mid-size companies, and Itau, Banco Bradesco SA, Grupo BTG Pactual (BBTG11) and China Construction Bank Corp. (939), O Estado de S. Paulo newspaper reported Sept. 21, without saying where it obtained the information.

“BicBanco is rising because of speculation it may be sold,” Pedro Galdi, chief analyst at brokerage firm SLW Corretora, said in a telephone interview from Sao Paulo. “These Brazilian mid-sized banks are focused on niches and get hurt once large rivals start competing in the same segment.”

An official at BicBanco didn’t immediately return a call for comment. “There’s no confirmation that any talks to sell control of the company may be concluded,” the company said in a regulatory filing today.

A Bradesco official declined to comment on the report, asking not to be identified in keeping with company policy. BTG said it doesn’t comment on market speculation, according to an e-mailed statement.

An Itau official didn’t return a call and e-mail. An official at CCB didn’t respond to a telephone call after business hours in Beijing.

BicBanco’s deposit ratings were cut to junk last month by Moody’s Investors Service, which said the bank’s loan margins are under “compression” as it shifts toward lower-risk borrowers.

To contact the reporter on this story: Francisco Marcelino in Sao Paulo at mdeoliveira@bloomberg.net

To contact the editors responsible for this story: David Scheer at dscheer@bloomberg.net; Christine Harper at charper@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.