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Itau Unibanco Holding S.A. (ITUB - Free Report) completed the acquisition of 40% equity stake in Itau BMG Consignado SA, for R$1.46 billion ($445 million), thus becoming the holder of 100% of the target company’s total share capital. Itau Unibanco already held 60% of BMG Consignado, when the deal was announced in Sep 2016.
Announcing the deal on Wednesday, the Brazilian banking giant stated in a release that this transaction will not produce any material results for the company in 2016.
The acquisition was completed through its subsidiary Itau Unibanco S.A, after receiving the required regulatory approval and complying with the conditions set forth in the agreement. The purchase of the totality of equity interest in BMG Consignado was being held by Banco BMG S.A. (BMG) earlier.
Notably, through this transaction, the company strategizes to operate with less risky assets which attract profits and hence create long-term value for its shareholders.
Further, per the new agreement, made on the same day, Itau Unibanco and BMG will maintain an alliance for the distribution of payroll loans of BMG Consignado – specialized in payroll loans – and its affiliates, on an exclusive basis, through certain distribution channels of BMG and its affiliates.
Itau Unibanco will continue its status as the leading private bank, supported by the BMG Consignado portfolio, in addition to the company’s other payroll loan operations.
Bottom Line
Itau Unibanco’s growth prospects look encouraging as it remains focused on building strategies for inorganic expansion. The company is focused on its strategy to internationalize the bank, with expansion of operations in Brazil and abroad. In Oct 2016, the company announced that it will acquire Citigroup’s Brazilian consumer banking business. Also, the merger with CorpBanca in Apr 2016 strengthened the company’s footprint in Latin America.
Itau Unibanco currently holds a Zacks Rank #2 (Buy). Shares of the company have gained more than 72% so far this year, significantly outperforming the Zacks categorized Foreign Banks industry’s growth of 6.1%.
Better-ranked stocks in the same space are Barclays PLC (BCS - Free Report) and Societe Generale Group (SCGLY - Free Report) , both sporting a Zacks Rank #1 (Strong Buy). Over the last 60 days, the Zacks Consensus Estimate for the current year jumped 52.3% to 67 cents for Barclays and 11.4% to 98 cents for Societe Generale. You can see the complete list of today’s Zacks #1 Rank stocks here.
Banco Santander, S.A. (SAN - Free Report) holds the same rank as Itau Unibanco. Over the last 60 days, the Zacks Consensus Estimate for the stock climbed up nearly 7% to 46 cents for the current year.
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Itau Unibanco (ITUB) Completes BMG Consignado Acquisition
Itau Unibanco Holding S.A. (ITUB - Free Report) completed the acquisition of 40% equity stake in Itau BMG Consignado SA, for R$1.46 billion ($445 million), thus becoming the holder of 100% of the target company’s total share capital. Itau Unibanco already held 60% of BMG Consignado, when the deal was announced in Sep 2016.
Announcing the deal on Wednesday, the Brazilian banking giant stated in a release that this transaction will not produce any material results for the company in 2016.
The acquisition was completed through its subsidiary Itau Unibanco S.A, after receiving the required regulatory approval and complying with the conditions set forth in the agreement. The purchase of the totality of equity interest in BMG Consignado was being held by Banco BMG S.A. (BMG) earlier.
Notably, through this transaction, the company strategizes to operate with less risky assets which attract profits and hence create long-term value for its shareholders.
Further, per the new agreement, made on the same day, Itau Unibanco and BMG will maintain an alliance for the distribution of payroll loans of BMG Consignado – specialized in payroll loans – and its affiliates, on an exclusive basis, through certain distribution channels of BMG and its affiliates.
Itau Unibanco will continue its status as the leading private bank, supported by the BMG Consignado portfolio, in addition to the company’s other payroll loan operations.
Bottom Line
Itau Unibanco’s growth prospects look encouraging as it remains focused on building strategies for inorganic expansion. The company is focused on its strategy to internationalize the bank, with expansion of operations in Brazil and abroad. In Oct 2016, the company announced that it will acquire Citigroup’s Brazilian consumer banking business. Also, the merger with CorpBanca in Apr 2016 strengthened the company’s footprint in Latin America.
Itau Unibanco currently holds a Zacks Rank #2 (Buy). Shares of the company have gained more than 72% so far this year, significantly outperforming the Zacks categorized Foreign Banks industry’s growth of 6.1%.
Better-ranked stocks in the same space are Barclays PLC (BCS - Free Report) and Societe Generale Group (SCGLY - Free Report) , both sporting a Zacks Rank #1 (Strong Buy). Over the last 60 days, the Zacks Consensus Estimate for the current year jumped 52.3% to 67 cents for Barclays and 11.4% to 98 cents for Societe Generale. You can see the complete list of today’s Zacks #1 Rank stocks here.
Banco Santander, S.A. (SAN - Free Report) holds the same rank as Itau Unibanco. Over the last 60 days, the Zacks Consensus Estimate for the stock climbed up nearly 7% to 46 cents for the current year.
Zacks' Top Investment Ideas for Long-Term Profit
How would you like to see our best recommendations to help you find today’s most promising long-term stocks? Starting now, you can look inside our portfolios featuring stocks under $10, income stocks, value investments and more. These picks, which have double and triple-digit profit potential, are rarely available to the public. But you can see them now. Click here >>