BRASILIA, April 4 (Reuters) - A preliminary report by Brazil’s antitrust regulator recommended imposing restrictions on Bradesco SA’s purchase of the Brazilian unit of HSBC Holdings PLC, according to the official gazette on Monday.
The board of Brazil’s antitrust regulator Cade said it should grant the deal final approval provided the banks agree on measures to minimize market concentration. The recommendation is not binding and is subject to approval by a separate Cade court.
According to Cade, despite HSBC’s small market share in Brazil, any merger operation should be viewed with caution because of “clear evidences” of low competitiveness in Brazil’s banking industry, in which lenders have one of the world’s highest profit margins.
The central bank approved the $5.2 billion acquisition in January. Bradesco first announced the deal in August. (Reporting by Silvio Cascione; Editing by Chizu Nomiyama)