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Report: Struggling Banco Gerador lands buyer

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Report: Struggling Banco Gerador lands buyer

After battling with a poor operating performance for sometime, Banco GeradorSA has reached a deal to be acquired by Agiplan Financeira aftertwo years of negotiations, ValorEconômico reported.

Banco Gerador has had an inadequate solvency ratio for the last several years andis undergoing an audit of its 2015 results due to questionable accountingpractices, according to previous reports.

The bank started operations in 2009 with the goal of servingsmall- and medium-sized businesses in northeastern Brazil, but began facingeconomic difficulties in 2014 when its solvency level fell well below theminimum 11% required by the central bank.

The head of Agiplan, Marciano Testa, reportedly said thatthe acquisition of the bank will help the financial group strengthen its loanportfolio and be a means to start attracting deposits. The new entity will becalled Banco Agiplan.

Agiplan presently has a loan portfolio of 380 millionBrazilian reais and through the deal it will take over Banco Gerador's loanportfolio of some 40 million reais along with its 200,000 banking clients.

The deal is pending approval from Brazil's central bank andthe terms of the deal have not been disclosed, the report noted.

As of May 4, US$1 wasequivalent to 3.54 Brazilian reais.