Aug. 16 (Bloomberg) -- Itau Unibanco Holding SA, Latin America’s largest bank by market value, said Brazil levied tax charges of 18.7 billion reais ($7.9 billion) on its 2008 purchase of Unibanco.
Brazil’s tax agency, Receita Federal, told Itau it should have booked the acquisition in a way that would “generate a taxable gain,” the Sao Paulo-based bank said in a regulatory filing today. Itau said it’s challenging the charges.
“The company considers as remote the risk of losing the case, an understanding confirmed by its lawyers and external advisers,” Itau said in the statement, which was signed by Alfredo Setubal, director of investor relations.
Itau agreed to buy Unibanco for about 26.7 billion reais in 2008, the biggest Brazilian banking-industry deal. Last year, the bank spent 11.8 billion reais to take private Redecard SA, Brazil’s second-biggest card-payment processor.
Itau declined 2 percent to 29.20 reais in Sao Paulo, the most since Aug. 6. The shares have slid 3.8 percent this year, compared with the 15 percent drop of Brazil’s benchmark Ibovespa index.
“Itau is declining because of the tax charges,” Pedro Galdi, chief strategist at Sao Paulo-based brokerage SLW Corretora, said in a telephone interview today. Galdi said tax decisions such as this one typically take many years to resolve in Brazil, so he doesn’t view it as a pressing issue for the bank.
To contact the reporter on this story: Francisco Marcelino in Sao Paulo at email@example.com