Banco do Brasil may announce the acquisition of a US bank before year end. A source from the state owned Brazilian bank said at a press conference the Bank is in talks with an American bank and will be making an announcement before year end. Ivan Monteiro, Banco do Brasil financial vice president said the bank is engaged in talks with the US acquisition target currently.

At the same time, the bank refuted conjecture that it is interested in picking up financially troubled Brazilian private bank Banco PanAmericano SA. There has been speculation regarding the state owned entity’s interest in PanAmericano, after PanAmericano was forced to borrow the equivalent of about $1.5 billion from an emergency banking fund last week because of “accounting inconsistencies” in the bank’s balance sheets.

Banco PanAmericano’s problems led to speculation that other banks may be interested in acquiring the institution, including Banco do Brasil. However, Banco do Brasil vice president further added that the bank is more interested in a U.S. acquisition than in a PanAmericano stake. The bank’s interest stems from the large number of Brazilians living in the U.S., especially in the Northeast.

Even so, he declined to name the particular US target bank, rather stating Banco do Brasil had narrowed its focus to a single U.S. bank. He further noted that after a detailed research of the U.S. market, the bank focused its interest on a single bank. He however said the target bank “is located in a region where there is a large Brazilian community.”

Earlier this year, Banco do Brasil bought a 51% stake in Argentina’s Banco Patagonia for $479.6 million. Patagonia is Argentina’s 10th largest bank. He said the likely value of the acquisition would be lower than what we paid for Banco Patagonia.

Government-controlled Banco do Brasil SA, is Latin America’s biggest bank in terms of assets. Banco do Brasil’s loan portfolio increased 19 per cent to 339.8 billion reais. The average default rate, defined as a delay in payment of more than 90 days, declined to 2.7 per cent in September from 3.6 per cent in the same month a year earlier. Banco do Brasil’s total assets increased 16 percent to 796.8 billion reais.

The lender’s shares increased 14 percent this year through yesterday, outperforming the 2.6 percent gain of the Bovespa benchmark stock index.