Itau Plans Sale of Argentine Unit to Banco Macro in Brazil

27 Aug, 2023

Itau Plans Sale of Argentine Unit to Banco Macro in Brazil

Brazil's prominent bank, Itau Unibanco, has entered into a definitive agreement to divest its Argentine operations to Banco Macro for a sum of around 250 million reais (approximately $51.47 million). As Latin America's largest financial institution, Itau is strategically reshaping its portfolio amidst this deal. The transaction's completion is anticipated to result in a one-time adverse impact of 1.2 billion reais on Itau's financial performance, a figure set to be recognized post-closure.

This decision aligns with Itau's June announcement of preliminary discussions with Banco Macro regarding the potential sale of its Argentine assets. The move is well-timed as Argentina navigates through a profound economic crisis. Itau's Argentine footprint, although modest in terms of staff and branches, features a comparatively smaller loan portfolio compared to markets like Chile and Colombia.

Following the successful handover, Itau plans to maintain services for local and regional corporate clientele, along with individuals in the wealth and private banking sectors, through its foreign subsidiaries. To further its commitment, Itau aims to establish a representative office in Argentina, contingent upon regulatory approvals from authorities in both Argentina and Brazil.

Notably, Itau's Argentine loan book is valued at 9.1 billion reais, comprising just over 4% of its international portfolio and less than 0.8% of its total 1.15 trillion-real portfolio. With approximately 1,500 employees in Argentina, Itau's workforce is more substantial than that in Paraguay and Uruguay, but smaller than in Chile and Colombia. Presently, the bank operates 71 branches in Argentina, comparable to its presence in Colombia and notably fewer than its 179 branches in Chile. Through this strategic maneuver, Itau adapts to changing economic dynamics while reinforcing its commitment to client service and long-term growth.