Brazil's Itau Said to Aim to Sell 3 Billion Reais in Bad Loans

  • Bank aims to close the deal before the end of the year
  • Itau is Latin America's biggest bank by market value

Itau Unibanco Holding SA, the biggest Latin American bank by market value, is seeking to sell non-performing loans with a face value of as much as 3 billion reais ($760 million), according to three people who were approached about buying the debt.

The loans are part of Itau’s corporate credit portfolio, said the people, who asked not to be identified because they aren’t authorized to speak about the matter. The Sao Paulo-based bank is using PricewaterhouseCoopers as financial adviser for the sale, and expects to complete it by the end of the year, the people said. Itau’s press office declined to comment.

Total new lending in Brazil declined 1.4 percent in the eight months through August from a year earlier, according to the central bank, as forecasts call for the country’s longest recession since the Great Depression. Household debt as a portion of disposable income declined to 45.8 percent in June, a one-year low, according to the most recent data available from Brazil’s central bank.

Brazil’s development bank, BNDES, also hired PricewaterhouseCoopers to sell as much as 6 billion reais in face value of non-performing loans, and the process is in the early stages, the people said. 

Banco Bradesco SA sold 600 million reais of non-performing auto loans earlier this year, the people said.

BNDES’s press office said that there is no set time line for when the bank will sell part of its non-performing loan portfolio. Press officials for PricewaterhouseCoopers and Bradesco didn’t immediately reply to requests for comment.

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