18 May 2011
Banco do Brasil, Latin America’s largest bank by assets, announced plans to buy a South Florida bank for $6 million and to invest $25 million over the next five years to expand its U.S. operations.
The Brazilian government-controlled bank is acquiring Coral Gables-based EuroBank, a three-branch bank that has been seeking capital because of problems with some real estate loans.
Plans call for expanding tthe Florida bank to 20 branches, with business geared partly to Brazilians and Brazilian companies in the area, according to Allan Toledo, Banco do Brasil's vice president for international business.
Eurobank had $95 million in assets and $85 million in loans as of March 31, with offices in Coral Gables, in Boca Raton and in Pompano Beach, a city known for a large Brazilian community. The bank has roughly 15,000 customers, but could reach 400,000 customers in five years, Toledo told reporters.
Banco do Brasil began expanding overseas last year by acquiring a majority stake in Argentina’s Banco Patagonia. It also is eyeing deals in Chile, Colombia and Peru, as it aims to boost its share of profits from overseas business from 1 percent today to 9 percent in five years, news reports said.
In Miami, Banco do Brasil already has an office as a foreign agency, catering to clients living outside the United States. The EuroBank purchase, pending regulatory approvals, would be its first foray into serving U.S.-based customers.
The move comes as Brazilian investors expand their presence across South Florida. A Brazilian-led group recently bought Burger King, and Brazilians are snapping up real estate, which they find relatively cheap given the rise of Brazil’s currency and the decline in South Florida property values since 2007.
Brazil is South Florida’s largest trade partner by far, thanks to the country’s booming economy and its growing middle class that is buying lots more cellphones and high-tech imports. Some analysts forecast that Brazil, now the world’s seventh largest economy, could become No. 5 in five years.