UPDATE 1-Itáu, CorpBanca close to announcing venture -sources

Tue Jan 28, 2014 2:36pm EST
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By Guillermo Parra-Bernal, Felipe Iturrieta and Aluísio Alves

SAO PAULO/SANTIAGO Jan 28 (Reuters) - Itaú Unibanco Holding SA, Latin American's largest bank by market value, and Chilean lender CorpBanca SA could announce a partnership as early as Wednesday, sources with direct knowledge of the situation told Reuters.

São Paulo-based Itaú and CorpBanca, controlled by billionaire Alvaro Saieh, would create a new company and merge assets in Chile and Colombia, according to two of the sources, who declined to be identified because the deal has not been finalized.

Under the terms of the deal, Itaú would control 50.5 percent of the new company, said one source. In recent years Itaú has resorted to partnerships, such as the payroll lending venture with Banco BMG SA and an insurance joint operation with Porto Seguro SA, to avoid the difficulties that might crop up from a full combination.

For Itaú, an association with CorpBanca would not only open a significant window of opportunity into retail banking in Chile, but also provide a platform to grow in Colombia, South America's fastest-growing economy last year.

Both banks declined to comment.

For years Setubal sought to buy regional rivals, but backed off due to high valuations. Itaú began operations in Chile with the purchase of Fleet Boston Corp's local unit in 2006 and later HSBC Holdings Plc's operations in 2011.

Itaú and Santiago-based CorpBanca, Chile's fifth-largest bank and which also operates in Colombia, recently confirmed they were in acquisitions talks. As part of the deal, Itaú could inject cash and equity into the new company, one source said, with CorpBanca basically entering the deal with its assets.   Continued...