Reuters: Regulatory News: Santander may sell stake in Brazil unit-report

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Santander may sell stake in Brazil unit-report May 25th 2012, 12:17 Fri May 25, 2012 8:17am EDT * Santander may sell 30 pct-40 pct stake in Brazil unit * Estado says Bradesco, Banco do Brasil seen as bidders * Banco do Brasil denies report; others declined comment SAO PAULO, May 25 (Reuters) - Banco Santander, Spain's largest lender, is considering the sale of a stake on its Brazilian unit to raise capital to cover mounting losses in its home market, a local newswire said on Friday. Madrid-based Santander might sell between 30 percent and 40 percent of its Banco Santander Brasil subsidiary, Agência Estado said, citing unnamed sources with knowledge of the situation. Santander has no intentions to exit Brazil, which accounts for 30 percent of global earnings, the wire said. State-controlled Banco do Brasil, the nation's largest bank, and Banco Bradesco, Brazil's second-biggest nongovernment bank, might be likely bidders for the stake, the wire added. The price would include part of the goodwill amortized in Santander's purchase of ABN Amro's Brazilian operations in 2008, Agência Estado added. A spokesman for Osasco, Brazil-based Bradesco declined to comment on the report. Banco do Brasil said the report lacked any basis. Efforts to reach Santander Brasil press representatives in São Paulo were unsuccessful. The report comes as political pressure is mounting on local lenders to lower borrowing costs amid climbing defaults and flagging demand for new credit. Analysts consulted by Agência Estado valued Santander Brasil at between 100 billion reais and 160 billion reais ($49.5 billion to $79 billion). Over the past month, Brazilian President Dilma Rousseff toughened her tone and demanded private-sector banks bolster lending and cut rates to help kick-start Latin America's largest economy. Banco do Brasil and Caixa Econômica Federal, Brazil's No. 1 mortgage lender, have stepped up lending and cut interest rates as a way to force their rivals to lower borrowing costs. Shares of Santander Brasil have gained 12 percent this year, after shedding about one-third in 2011, partly because of speculation of a stake sale. Link this Share this Digg this Email Reprints

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