Brazilian banks Itau and Unibanco announced Monday they will merge to create South America's largest private-sector banking group, forging a continental powerhouse the banks hope will become a global player. Banco Itau SA and Unibanco Holdings SA did not disclose the value of the stock swap deal, but said the new bank would be called Itau Unibanco Holdings SA and would have combined assets of 575.1 billion reals ($261.4 billion). Itau said in a statement the combined institution would rank among the world's top 20 in terms of market capitalization, though data from Standard and amp; Poor's indicates it would not be among the top 50 in assets. Sao Paulo-based consultancy Economatica estimated the combined banks would have a market value of $41.3 billion - making it the sixth highest in the Americas. It also would be larger than Brazil's state-owned Banco Brasil SA and the private Banco Bradesco SA. Itau is currently the No. 2 private-sector bank behind Bradesco, and Unibanco is No. 3. The deal must still be approved by Brazil's central bank and it was not clear when that would happen, but government officials praised the merger in comments that indicated the deal would have little trouble meeting regulatory approval. Roberto Setubal, Itau's chief executive, said the new bank would strive to be a “global player” within five years and said the financial crisis doesn't worry him. “The moment is unique. Changes are occurring around the world ... but we're optimistic,” Setubal told reporters. “We would not have undergone a transaction of this size if we were afraid.” Unibanco chief executive Pedro Moreira Salles said the new bank would focus on integrating operations within Brazil, Latin America's largest economy, before trying to take on a global role.
