Citigroup’s Brazil Retail Assets Valued at $350 Million

Updated on
  • Santander said to be working with Morgan Stanley as adviser
  • Bids for the Brazil assets could fetch as much as $450 million

Banco Santander SA, Spain’s biggest bank, hired Morgan Stanley as an adviser to help it buy Citigroup Inc.’s retail assets in Brazil for $350 million to $450 million, according to three people with knowledge of the matter.

Santander, whose Brazil unit generates about 19 percent of the Madrid-based company’s revenue, also is working with Credit Suisse Group AG, other people said last week, asking not to be identified discussing private talks. The Spanish company didn’t make a bid for Citigroup’s Colombia unit, which is also for sale, and is working with a Lazard Ltd. venture to advise on its proposal to buy Citigroup’s assets in Argentina, the people said.

Citigroup said in February it would sell its retail-banking and credit-card operations in the three countries, and hold on to the businesses that serve institutional and corporate clients there. The New York-based company’s retail operations never achieved the kind of scale needed to succeed in Brazil and Argentina, industry analysts said at the time. Banco Santander Brasil SA Chief Executive Officer Sergio Rial said last month that the company was interested in the Citigroup business, without providing more details.

Itau Unibanco Holding SA, Brazil’s biggest bank by market value, and Banco Safra SA, the lender owned by billionaire Joseph Safra, bid only for the Brazilian assets, according to the people. No firm is seeking all three, the people said.

Citigroup’s local businesses had a book value of 5 billion reais ($1.55 billion) in Brazil as of December, including retail, corporate and investment banking. It had about 71 branches as of December 2014. In Argentina, the assets are valued at $300 million, one of the people said earlier this month.

Citigroup expects to announce sales in September, Helio Magalhaes, the bank’s CEO in Brazil, said earlier this month. Magalhaes doesn’t see major obstacles to approval by Brazil’s antitrust regulator, known as Cade, he said.

Santander didn’t respond to a request for comment. Representatives of Citigroup and Morgan Stanley declined to comment.