The Brazilian Central bank approved the acquisition of a controlling stake in Argentina's Banco Patagonia SA by Brazil's largest bank, the state-owned Banco do Brasil SA, Banco Patagonia reported last week in a statement.

Banco do Brasil SA agreed to buy a controlling stake in Argentina’s Banco Patagonia SA back in April, marking the federally run lender’s first acquisition abroad. The purchase in South America’s second-largest economy allows Banco do Brasil to join competitors Banco Bradesco SA and Itau Unibanco Holding SA in expanding overseas.

In April, Banco do Brasil announced the acquisition of a 51% stake in Banco Patagonia for $479.6 million. Banco Patagonia is Argentina's tenth largest bank, with total assets of $2.53 billion at the end of 2009, and 126 branches, mainly in Buenos Aires. The bank has more than 775,000 customers.

Banco do Brasil approved the issue of up to 286 million new shares, valued at 8.56 billion reais ($4.89 billion) to help finance an international expansion. The investment payments were made in installments of 5 percent at the agreement signing, 35 percent at this closing and the other 60 percent in four installments.

Banco do Brasil S.A. is the major Brazilian and Latin American bank by assets. The bank, headquartered in Brasília, and is the oldest active bank in Brazil — and one of the oldest financial institutions in the world.

Banco do Brasil is controlled by the Brazilian government but its stock is traded at the São Paulo Stock Exchange and its management follows standard international banking practices. Since 2000 it has been one of the four most-profitable Brazilian banks (the others being Itaú Unibanco, Bradesco, and Santander Brasil) and holds a strong leadership in retail banking.

Banco Patagonia SA is an Argentinean financial institution principally engaged in the commercial banking sector. Its services and products include saving and current accounts, debit and credit cards, fixed-term deposits, consumer and commercial loans, mortgages, financial assessment, cash management and other banking operations processing services to businesses and individuals, as well as to small and medium enterprises (SMEs).

The Bank is also involved in the insurance sector and it offers a range of insurance policies. Banco Patagonia SA is present in Brazil, Chile, Peru, Colombia and Mexico, among others. The Bank owns such subsidiaries as Patagonia Inversora SA Sociedad Gerente de Fondos Comunes de Inversion, Patagonia Valores SA Sociedad de Bolsa and Banco Patagonia (Uruguay) SAIFE.

8 Nov 2010.