Banco Santander Brasil has our attention

This upcoming IPO has room to grow in Brazil's lucrative banking market

Bill Buhr 28 September, 2009 | 12:52PM

This report is made available compliments of Morningstar IPO Research Services, which is based in the USA. For more information on Morningstar IPO Research, please contact Marc DeMoss at marc.demoss@morningstar.com.

Let's step away from the busy IPO market to focus on one heading our way in a few weeks. Banco Santander Brasil will attempt to raise between 11.55 billion and 13.12 billion reals, or roughly $7 billion, offering 525 million shares. The offer price will be finalised on Oct. 6, with the ADRs trading the following day. Morningstar equity analyst Maclovio Pina is intrigued by the offering, and gives us some background on this high-interest IPO.

"Spain's Grupo Santander will spin-off around 15% of its interest in Banco Santander Brasil, the country's 4th-largest bank. With a deposit market share of roughly 10%, we think Santander Brasil has room to grow in Brazil's lucrative banking market, with expansion plans that should reap the benefits of this booming space. Brazil has emerged from the global downturn in fairly decent shape, and while growth is still slightly tepid, the country's economy is showing renewed signs of expansion, which we think will help support the bank's strategy.

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About Author

Bill Buhr  Bill Buhr is an IPO strategist and stock analyst with Morningstar.

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