Banco do Brasil Said Among Bidders for Bankia Florida Unit

Banco do Brasil SA has emerged as one of the top suitors for Bankia SA’s Florida unit, which may fetch $800 million, according to four people with knowledge of the matter.

Bankia, the Spanish lender that needed the biggest European bailout, is working with Goldman Sachs Group Inc. to find buyers and has narrowed prospective suitors for City National Bank of Florida to a handful, said the people, who asked not to be named because the process is private. Final bids for the 26-branch bank are due in three to four weeks, they said.

More than a dozen banks expressed interest in Miami-based City National, which has almost $5 billion in assets, said the people. Bankia had planned to solicit bids from lenders including BankUnited Inc., BB&T Corp., PNC Financial Services Group Inc. and Toronto-Dominion Bank, a person with knowledge of the matter said in December.

Bankia, based in Valencia, Spain, is selling City National under the terms of its restructuring, which requires the company to shrink its balance sheet and sell off non-core businesses and stakes in companies.

Bank Rescue

Bankia, Spain’s fourth-biggest banking group, received 18 billion euros ($23 billion) in aid as part of the bailout of about 40 billion euros for its financial system that Spain negotiated with Europe. The company posted a record after-tax loss of 21.2 billion euros last year on charges to clean up a balance sheet wrecked by losses linked to real estate.

Chairman Jose Ignacio Goirigolzarri said in February he expected more than 12 bidders for the U.S. bank. Caja Madrid, the biggest of the seven former savings banks that combined to form Bankia, paid $927 million for a majority stake in City National in 2008.

Spokesmen for Bankia, City National and Goldman Sachs declined to comment. Banco do Brasil said it won’t comment on “market rumors,” according to an e-mailed statement. Spokesmen at BankUnited, BB&T, PNC and Toronto-Dominion also declined to comment.

Banco do Brasil, based in Brasilia, is Latin America’s biggest bank by assets. It had $15.4 billion in assets in the U.S. on Sept. 30, according to the Federal Reserve. Paulo Rogerio Caffarelli, the company’s vice president for international business, reiterated in February that his firm is examining potential acquisition targets in Florida and New Jersey as it seeks to provide banking services to more Brazilians who live in the U.S.