Brazil's Banco Bradesco SA has embarked on its first-ever international acquisition by paying approximately US$ 500 million to buy BAC Florida Bank, which focuses on high-net-worth individuals in a move intended to close the gap with Brazilian rivals.
Based in Coral Gables, BAC Florida is controlled by Grupo Pellas, which was founded in 1877 in Nicaragua.
After the deal closes, Bradesco said its main goal is to provide a wide range of financial services in the United States to Bradesco clients and lure new customers to BAC Florida.
Bradesco Chief Executive Officer Octavio de Lazari said that the Brazilian bank's private banking clients have increasingly demanded diversification and greater access to global products.
This move underscores our expansion not only in the U.S., but also in Latin America as a whole, as BAC has clients all over the region, he said. Around 20% of BAC Florida's clients are Brazilian and 9% are American.
Still, Lazari said Bradesco is not seeking to build a retail base outside Brazil, but wants to boost its private banking business, which manages nearly US$ 50 billion in assets.
BAC Florida will add 10,000 customers to Bradesco's 13,000 private banking clients in Brazil.
”This acquisition is small for Bradesco (less than 1 percent of the bank's market cap) and tends to help the bank to reduce the gap of its private banking business,” Itaú BBA said in a note to clients, estimating a 30 basis point impact on capital.
Bradesco's footprint in private banking is smaller than rival Itaú Unibanco Holding SA, which has US$ 120 billion in assets under management. Itaú acquired the Latin America private banking business of ABN Amro and now-defunct BankBoston nearly 12 years ago.
BAC Florida ended 2018 with total assets of US$ 2.2 billion and net income of US$ 29 million. One of its main business segments is real estate financing.