BTG's BSI Private Bank Draws Interest From Swiss BancaStato

  • BTG has been selling assets after arrest of ex-CEO Esteves
  • BTG board approved negotiations with undisclosed parties

Banca dello Stato del Cantone Ticino said it made a non-binding offer for Grupo BTG Pactual’s Swiss private bank, BSI SA, that is backed by two partners.

BTG’s board has approved sale negotiations for the unit, though there is no certainty a deal will be reached, the embattled Brazilian investment bank said in a separate statement Thursday, without identifying potential bidders. BancaStato, owned by the Swiss canton of Ticino where BSI is based, didn’t name its partners.

BTG has been seeking to sell assets since the arrest in late November of Andre Esteves, its chief executive officer and chairman at the time. He is accused of trying to obstruct a corruption investigation involving oil company Petroleo Brasileiro SA. Esteves, who has been placed under house arrest in Sao Paulo, has denied any wrongdoing through his lawyers.

Bernardino Bulla, chief executive officer of BancaStato, said by phone that there is no deadline for the offer and there are currently no active negotiations. He said BSI would be a financial investment rather than a company BancaStato fully consolidates on its balance sheet. He said he would welcome the opportunity to support the regional economy by investing in a local company.

The Brazilian bank acquired Ticino-based BSI from Italy’s Assicurazioni Generali SpA for 1.25 billion Swiss francs ($1.25 billion) in September.

Handelszeitung newspaper reported Wednesday that J. Safra Sarasin Holding AG was ready to sign a deal for BSI. Sarasin denied the report. Julius Baer Group Ltd. is “not really interested” in buying the private bank, CEO Boris Collardi told reporters on Thursday.

So far, BTG’s asset sales have helped reassure investors. Its $1.3 billion in contingent convertible securities have stabilized at about 71 cents on the dollar after reaching 40 cents on Dec. 9. Holders of the securities could be wiped out if BTG’s Tier 1 capital ratio falls below a specified level. BTG stock has climbed 20 percent since from a record low on Dec. 10.

BTG securities have begun to recover as the bank succeeds with asset-sale plan

BTG has already announced several deals to reinforce its balance sheet, many of which are smaller than BSI. On Dec. 31, the company said it agreed to sell a stake in distressed asset-management firm Recovery do Brasil Consultoria SA to Itau Unibanco Holding SA for 640 million reais ($159 million). It sold its remaining holding in hospital chain Rede D’Or Sao Luiz SA to Singaporean sovereign-wealth fund GIC Pte for 2.38 billion reais. Several other transactions are under consideration.

The BSI move would mark an major about-face for a company that had said in September that it could use the Swiss firm as a platform for further expansion in the country.

Before it's here, it's on the Bloomberg Terminal.