UPDATE 1-Santander Brasil, Bonsucesso to form lending joint venture

jueves 31 de julio de 2014 08:05 GYT

(Adds background, data on Santander Brasil results)

By Guillermo Parra-Bernal and Aluísio Alves

SAO PAULO, July 31 (Reuters) - Banco Santander Brasil SA agreed to pay 460 million reais ($204 million) to get a 60 percent stake in a payroll loan joint venture with smaller peer Banco Bonsucesso SA, the latest step by the nation's No. 1 foreign lender to ramp up its consumer finance division.

Terms of the transaction, which were outlined on a securities filing on Thursday, call for Santander Brasil's Aymoré Credito consumer finance unit to join Bonsucesso, which agreed to transfer all of its payroll and payroll credit card lending business in exchange for a 40 percent stake in the venture.

Also on Thursday, Santander Brasil reported second-quarter earnings.

Chief Executive Officer Jesús Zabalza said this week that Santander Brasil wanted to grow in payroll lending and credit to smaller businesses. The Pentagna Guimarães family, which founded Bonsucesso in 1992, has spearheaded its expansion in both segments, which are less risky than other consumer and corporate lending like auto and working capital loans.

The creation of the venture comes the day Banco Santander SA , Santander Brasil's parent, said profit from its Brazilian operations was no longer the largest contributor to earnings. In recent years, Santander Brasil has underperformed its peers, which have grown rapidly through acquisitions and by cutting exposure to less-creditworthy borrowers.

The Santander Brasil-Bonsucesso deal remains subject to regulatory approval.

The venture's structure is similar to that of one signed in 2012 between private-sector rival Itaú Unibanco Holding SA and payroll lender Banco BMG SA. BMG was founded three decades ago by close relatives of the Pentagna Guimarães family.   Continuación...