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SAO PAULO, June 17 (Reuters) - Banco Bradesco SA, Brazil’s No. 2 private-sector bank, will make a binding offer to buy HSBC Holdings Plc’s Brazilian unit next month, the newswire service of O Estado de S. Paulo newspaper said on Wednesday.
The newswire, Agência Estado, said that Bradesco Chief Executive Officer Luiz Carlos Trabuco told it an event hosted by banking group Febraban that the offer will be announced in tandem with a timetable for the sale process proposed by HSBC. A spokesman at Febraban later confirmed the content of Trabuco’s remarks to Estado.
The process of disposing of HSBC Bank Brasil Banco Múltiplo, as the unit is formally known, is well advanced with Brazil’s top three private-sector lenders all having made informal bids, a source with direct knowledge of the situation told Reuters last week. The sale could fetch between $3 billion and $4 billion, said the source, who requested anonymity since the talks remain private.
Estado said that Trabuco declined to elaborate on Bradesco’s bid for HSBC Brasil although he noted that “since we are in the second phase of process, the appetite, the size of the check, will be practically decided at the very last minute”.
Last week, Bloomberg News reported that Bradesco had made the highest bid for HSBC Brasil, 14 billion reais ($4.5 billion), in an all-cash deal.
Itaú Unibanco Holding SA and Banco Santander Brasil also have had access to the sale’s preliminary documents and have made bids, the source told Reuters. Both Itaú and Santander Brasil placed offers below Bradesco‘s, the source added.
Estado said that Trabuco played down the impact of a purchase of HSBC on competition in Brazil’s banking industry, saying that the current structure of the industry entices “fierce competition”. In Brazil, the top 10 institutions control about 85 percent of the banking system’s assets, according to central bank data.
Preferred shares in Bradesco shed 1.7 percent to 27.83 reais on Wednesday.
$1=3.0874 Brazilian reais Reporting by Guillermo Parra-Bernal; Additional reporting by Aluísio Alves and Asher Levine in São Paulo; Editing by Chris Reese and Peter Galloway