UPDATE 4-Itaú to expand in Chile and Colombia with CorpBanca deal
By Guillermo Parra-Bernal and Rosalba O'Brien
SAO PAULO/SANTIAGO Jan 29 (Reuters) - Brazilian bank Itaú Unibanco Holding SA said it would acquire control of leading Chilean bank CorpBanca SA, a deal worth an estimated $3.7 billion that would help it expand beyond its stagnant home turf into more dynamic markets.
The agreement, announced Wednesday, would not only give Itaú an important foothold in retail banking in Chile but also provide a way to grow in Colombia, South America's fastest-growing economy last year.
The agreement calls for Itaú to pump $652 million into its Chilean unit and then combine it with CorpBanca. The new entity, which will be named Itaú CorpBanca, will be 50.5 percent-owned by the São Paulo-based lender and also will take over the Colombian units of both banks.
Itaú CorpBanca will have a market value of $8 billion, $44 billion in assets, a $33 billion loan book, about 10,000 employees and 390 branches.
"This is a stepping stone towards business opportunities in Chile, Colombia, Peru, Central America," Ricardo Marino, Itaú's head of Latin America businesses, said on a conference call.
For years Chief Executive Officer Roberto Setubal tried to buy regional banks but backed off due to high valuations. Itaú, Latin America's largest bank by market value, began operations in Chile with the purchase of Fleet Boston Corp's local unit in 2006 and bought HSBC Holdings Plc's operations in 2011.
Itaú is contending with slowing economic growth and rising household debt in Brazil, where it trails state-run lender Banco do Brasil SA. Continued...