Brazil Itau Sells High-Risk Insurance Unit For BRL1.5 Billion to ACE
By Rogerio Jelmayer
SAO PAULO--Brazil private-sector bank Itau Unibanco Holding S.A. (ITUB, ITUB3.BR, ITBUB4.BR) on Friday said it sold its high-risk insurance unit to U.S. insurance company ACE Ltd. (ACE) for a total of 1.5 billion Brazilian reais ($682 million).
ACE will pay for the acquisition in cash and Itau said that the sale will generate a positive effect in its net profit worth BRL1.1 billion.
Itau will keep its retail and personal-insurance units. The division offers policies for infrastructure projects, mainly in the oil-and-gas industry. One of its main clients is state-run oil company Petroleo Brasileiro SA (PBR, PETR3.BR, PETR4.BR), or Petrobras.
The operation sold is very small for Itau, representing less than 1% of the bank's business.
"The transaction is in line with Itau Unibanco's strategy of focusing on the distribution of its insurance products through its retail banking network, credit cards and branded cards, while increasing its insurance premiums throughout the bank's activities in life and personal accidents, theft, lending, travel, extended warranty and other mass market products," Itau said in a press release.
Write to Rogerio Jelmayer at firstname.lastname@example.org
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