Brazil's largest bank Itaú Unibanco Holding S.A. (ITUB) seems keen on broadening its operational range and is seeking opportunities to foray into the Mexican market. The bank has shown its inclination towards the Mexican financial group Grupo Financiero Banamex SA, which was acquired by Citigroup Inc. (C) in 2001.
According to Reuters, Itaú Unibanco has been hesitant of acquiring foreign units as currency depreciation made them high priced. However, in a recent event, officials of the bank revealed interest in Banamex as well as the Mexican market.
Mexico, a major country in Latin America, provides extensive opportunities for banks given its favorable demographics and infrastructure, which facilitate innovative use of digital technology. Itaú Unibanco looks ahead to capitalize on the available growth prospects in the Mexican retail banking market to achieve its target of increasing profits through non-Brazil operations.
However, no discussion for cracking an acquisition deal has been initiated by Itaú Unibanco yet. Moreover, in Sep 2014, Citigroup and Banamex announced a four-year $1.5 billion investment program in Mexico. The company's enhanced investments indicate that it may not consider any acquisition offer for Banamex.
Itaú Unibanco gained a controlling interest in Chile-based bank CorpBanca (BCA) this year, which will assist it in widening its retail banking base in Chile and Colombia.
Currently, Itaú Unibanco holds a Zacks Rank #3 (Hold). A better-ranked foreign bank is Banco Latinoamericano de Comercio Exterior, S.A (BLX), which carries a Zacks Rank #2 (Buy).
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