SAO PAULO (Reuters) - Grupo BTG Pactual SA BBTG11.SA is negotiating the sale of around 4 billion reais ($1.03 billion) in loans to rivals Itaú Unibanco Holding SA (ITUB4.SA) and Banco Bradesco SA (BBDC4.SA), two sources with direct knowledge of the situation said on Monday. The three banks expect to finalize the deal as early as this week, said the sources, who requested anonymity because negotiations are underway. The move would allow BTG Pactual to bolster its balance sheet and increase cash holdings, which have been impacted following the arrest of André Esteves, the bank’s former chief executive and chairman, the sources said. Reporting by Tatiana Bautzer; Additional reporting by Sarah McFarlane in London; Editing by Guillermo Parra-Bernal and Meredith Mazzilli
BTG Pactual is considering selling part of its commodities unit to raise capital following the arrest of their CEO and Chairman, Andre Esteves, which we noted early as this week. The bank is now looking to shore up its balance sheet after the arrest prompted clients to pull over $1bn in investments held at the bank's asset management division; the success of the bank's recent venture into commodities makes the unit an obvious choice for partial disposal. However, the bank may encounter difficulty finding a buyer among other banks, which have been reducing their exposure to risk due to tighter regulations.