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Report: Brazil's central bank eyes more restrictions in Itaú-XP deal

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Report: Brazil's central bank eyes more restrictions in Itaú-XP deal

Banco Central do Brasil is looking to impose changes in Itaú Unibanco Holding SA's stake purchase of brokerage firm XP Investimentos SA before approving the deal, Valor Econômico reported.

The central bank would reportedly like Itaú to acquire a stake in XP Investimentos that is less than the 49.9% it originally planned, Valor said, which did not cite a source for the information. The central bank believes this would effectively preserve the independence of XP Investimentos, the report added.

Other proposals include removing the sale and purchase options from the agreement regarding the company's controlling stake. Under the deal, XP's partners have the option to sell all shares to Itaú and leave the company starting in 2024. Itaú also has the option to purchase the controlling stake starting in 2033.

Cade counselor Cristiane Alkmin Schmidt earlier said the central bank should reject the deal, citing, among other reasons, a problem in the way Itaú initially presented itself as only a minority stakeholder. According to the counselor, the operation could culminate in the bank holding a majority stake. Cade passed the deal earlier this year with restrictions.

The central bank is also considering a limit to Itaú's participation in the governance of XP Investimentos, Valor said. In the agreement, Itaú could elect two members on the brokerage firm's board, nominate three people for CFO and appoint a fiscal council.

The central bank could also suggest new measures for XP Investimentos itself, the report said. Although the central bank is not looking to veto the deal, it is considering more restrictions than those authorized by Cade, Valor cited a source as saying.

The authority is scheduled to hold talks with the parties this week regarding the purchase.