Brazilian bank, Banco do Brasil, Monday reported that it had gone into a joint venture with Banco Bradesco and Portuguese bank, Banco Espirito Santo for expansion overseas, in Africa. Banco do Brasil is Brazil and Latin America’s biggest bank in terms of assets. The new investment vehicle will undertake its operations in Africa but on its own, the Banco do Brasil said it might as well be considering additional acquisitions.

Banco do Brasil is owned by the Brazilian government and the announcement said that the deal might see the group of three invest in acquisitions of stakes in regional lenders in addition to establishing their branches in Africa, said a filling the group made to the Brazilian securities watchdog. On the other hand, the deal is also expected to reinforce the partnership between Banco do Brasil and Bradesco. Bradesco is Brazil’s second biggest private bank and the two Brazilian banks recently mergered their card businesses.

Therefore, a holding company will be established by the group to integrate existing Banco Espirito Santo’s holdings in Africa and strategize for future investments. In the filling to the securities watchdog, the three firms further reiterated that they consider an eventual partnership as a significant approach to reinforcing offshore ventures by Brazilian and Portuguese firms. As such, such investment undertakings would go a long way in improving the existing trade relations, read the filling.

The Portuguese bank, Banco Espirito Santo, already has operations in the African continent and its joint venture with the two Brazilian firms is expected to bolster their overseas expansion. Banco Espirito is Portugal’s largest traded bank in terms of market value and the deal will see its African holding company form the venture with the Brazilian banks. The venture will acquire stakes in the holdings financial institutions based in Africa, said the regulatory filling.

On its part, the Brazilian finance Ministry was upbeat over the deal, reiterating that the African partnership is crucial in maintaining an international presence for business expansion as well as encouraging increased trade to Brazil. Banco do Brasil raised $5.54 billion last month through a stock offering for its planned expansion and increased lending.

Currently, the state owned bank is mulling another acquisition in the US. On the other hand, Bradesco as well harbours expansion plans in Latin America and overseas. The banks will complete in 60 to 90 days studies of their venture in Africa with Banco Espirito Santo.