HSBC Brazil Antitrust Issue Said to Be Obstacle for Local Firms

HSBC Holdings Plc’s sale of its Brazil unit would face antitrust questions if a domestic bank as large as Itau Unibanco Holding SA or Banco Bradesco SA attempts a purchase, a government official familiar with the matter said.

Spain’s Banco Santander SA would face fewer obstacles because its share of Brazil’s lending and credit-card markets is smaller, the person said, asking not to be identified because the matter is private. All three companies have said publicly they are considering a purchase of the London-based firm’s Brazil operations.

HSBC said Tuesday it would sell the money-losing unit along with its Turkey business to help restore profit growth. The bank also plans to eliminate 25,000 jobs. Bradesco, based in Osasco, is the most likely buyer of the HSBC unit and will probably pay $3.2 billion to $4 billion, people with direct knowledge of the matter said this week.

Banking acquisitions are reviewed by both the central bank and the nation’s antitrust regulator. While Cade, as the antitrust agency is known, looks into market competition and how customers would be affected by a deal, the monetary authority’s role is to guarantee the stability of the financial system.

Officials at Cade and the central bank declined to comment on HSBC because no deal has been announced. Sao Paulo-based Itau declined to comment, as did Santander, Bradesco and HSBC.

Bradesco had a share of about 10 percent of Brazil’s lending market, compared with 12.6 percent for Itau and 6.7 percent for Santander as of December, according to the central bank. HSBC’s stake was 1.8 percent.

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