SAO PAULO, November 3 – Brazilian banks Itau and Unibanco announced Monday they were merging "to create the biggest financial group in South America."
The new bank will be among the 20 biggest in the world, they added.
The public notification given to stockmarket authorities said the merged bank will be called Itau Unibanco.
Itau is currently the second largest private-sector bank in Brazil, and Unibanco is ranked fourth.
Together, they will have assets of 575 billion reais (263 billion dollars) and account for around 20 percent of Brazil\’s savings accounts and credit.
Once the all-share transaction is complete — and if it is approved by regulators — Itau Unibanco will push past state-owned Banco do Brasil, currently the biggest bank in Latin America.
According to Fortune magazine, Itau made two billion dollars in profits last year from 29 billion dollars in revenues and 168.6 billion dollars in assets.
The union between Itau and Unibanco was the subject of talks for the past 15 months, the banks said in their joint statement.
Their new entity will have "the economic capacity to transform itself into a vital partner for the development of Brazilian companies here and abroad," they said.
The statement stressed that Itau Unibanco would have a "strong international presence," notably in the countries in the Mercosur trade bloc which comprises Argentina, Brazil, Paraguay and Uruguay.
"The institution will have the necessary agility to increase Brazil\’s presence on the world stage," it said.