Banco Macro SA is considered the strong favorite to buy Banco do Brasil SA's stake in Argentina-based Banco Patagonia SA, with nonbinding offers due to be submitted starting Feb. 15, El Cronista reported, citing sources in the local banking sector.
Banco do Brasil, which has a 59% stake in Banco Patagonia and has hired JPMorgan Chase & Co. to manage the deal, is reportedly looking to sell part of that stake to generate cash for its core operations in Brazil.
Other banks reportedly interested in Banco Patagonia include Banco de Galicia y Buenos Aires SA, BBVA Banco Francés SA and Brazil's Itaú Unibanco Holding SA, but Banco Macro is in the strongest financial position to make the purchase, the sources said.
Banco Patagonia is valued at about $1.2 billion, and Banco Macro reportedly has about $265 million in cash as well as access to at least $1 billion in financing from foreign banks, which it could repay in about four years, according to the report.
In addition, since Banco Patagonia handles public sector accounts in the province of Rio Negro, it is unlikely to be sold to a foreign bank. Banco Macro, meanwhile, has experience managing public accounts in other Argentine provinces, the report said.
Banco Macro, which specializes in personal loans, could also benefit from Patagonia's strong participation in the market for loans related to trade finance, the sources said.
If Banco Macro does end up buying Patagonia, it would become the largest private bank in Argentina in terms of deposits, ahead of Banco Santander Río SA and Banco Galicia, the report said.