Bank of America Exchanges BankBoston Franchise for Stock in Banco Itau
Strategic Transaction Improves Capabilities to Serve Clients in Latin America
CHARLOTTE, N.C., May 2 /PRNewswire/ -- Bank of America Corporation has entered into an agreement to exchange its BankBoston operations in Brazil for stock in Banco Itau, Brazil's second largest non-government owned banking company. Bank of America also agreed to negotiate exclusively to sell BankBoston's assets in Chile and Uruguay and certain other operations and accounts in Latin America to Banco Itau.
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The total consideration for the Brazil operations is approximately $2.2 billion in Banco Itau stock.
"Banco Itau stands out as a clear leader in Brazil and shares Bank of America's culture and philosophy," said Kenneth D. Lewis, chairman and chief executive officer. "This exchange allows us to convert our currently modest position in that growing market into a significant investment in one of the market leaders. We believe this will be better for both our clients in the region, who will obtain access to Itau's significant capabilities, and for Bank of America shareholders, who will have a strategic investment in a diversified market leader in order to better participate in the growth of the vibrant Brazil economy."
Brazil is the ninth largest economy in the world. Its economy is expected to grow about 3.5% in real terms over the next two years.
BankBoston has more than 140 offices and sales outlets in Brazil. It employs approximately 4,800 associates and has total assets of approximately US $8.8 billion. BankBoston has more than 80 offices and sales outlets in Chile and Uruguay, including those of OCA, the Uruguayan credit card company. It employs approximately 2,200 associates and has total assets of approximately US $3 billion.
BankBoston has done business in Brazil since 1947 and in Chile and Uruguay for more than 25 years. In the three countries, it is the leading bank serving high-net-worth individuals, and it has a top franchise in both the asset management and cash management businesses. It is the largest card issuer in Uruguay with nearly 50 percent of the market. It is considered one of the leading banks in terms of financial strength, quality of service and technological development.
"BankBoston is an outstanding franchise with a tremendous history of quality service to both corporate and individual clients," said Roberto Setubal, chief executive officer of Banco Itau. "We are extremely pleased to bring BankBoston into our company and to welcome Bank of America as an important strategic investor."
Banco Itau Holding Financeira S.A. (Itau) is Brazil's second largest non-government owned bank with assets of approximately $65 billion and total equity of approximately $6.7 billion. Itau provides a full range of banking activities, through its commercial, investment, consumer credit, mortgage loan, finance and investment credit, and lease portfolios, including foreign exchange operations, and other complementary activities, with emphasis on insurance, private pension plans, capitalization, securities brokerage and credit cards and asset management. The bank has approximately 2,400 banking centers and 22,000 ATMs throughout Brazil.
"This transaction will significantly enhance our ability to offer a more complete suite of products and superior geographic coverage in the Latin America region to global clients," Lewis said. "BankBoston has consistently offered products and services that were highly valued by our clients and I am pleased that through this transaction we will have the ability to further improve client satisfaction while enhancing shareholder returns."
Closing is subject to regulatory approval and certain conditions.
Bank of America is one of the world's largest financial institutions, serving individual consumers, small and middle market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk-management products and services. The company provides unmatched convenience in the United States, serving more than 54 million consumer and small business relationships with more than 5,700 retail banking offices, more than 16,700 ATMs and award-winning online banking with more than 19 million active users. Bank of America is the No. 1 overall Small Business Administration (SBA) lender in the United States and the No. 1 SBA lender to minority-owned small businesses. The company serves clients in 175 countries and has relationships with 98 percent of the U.S. Fortune 500 companies and 79 percent of the Global Fortune 500. Bank of America Corporation stock (NYSE: BAC) is listed on the New York Stock Exchange.
SOURCE Bank of America Corporation
/CONTACT: Investors: Kevin Stitt, +1-704-386-5667, or Lee McEntire, +1-704-388-6780, or Leyla Pakzad, +1-704-386-2024, or Media: Bob Stickler, +1-704-386-8465, all of Bank of America/ /Photo: http://www.newscom.com/cgi-bin/prnh/20050720/CLW086LOGO-b / /Web site: http://www.bankofamerica.com / (BAC)