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ABN Amro: Bid war means it’s get Real time

Whatever the conclusion of the bid war for ABN Amro, it will put the Dutch bank’s prize Brazilian asset, Banco Real, into the ring.

Amid all the noise and speculation surrounding Barclays’ bid for ABN Amro, one name has been noticeably absent: Banco Real. That’s odd.

Banco Real is in many ways the jewel in ABN Amro’s crown. It single-handedly accounted for more than 70% of ABN Amro’s income growth in 2006, contributing €3.7 billion to the Dutch bank’s bottom line. And the Brazilian outfit is also the only retail bank in the ABN Amro stable that is located in a fast-growing market.

Of course, ABN Amro hardly springs to mind as a big player in emerging market retail banking, and neither does Barclays. For that reason, the takeover speculation that has surrounded Banco Real for years is very unlikely to go away even if and when a Barclays deal is done.

There are certainly reasons why Barclays might not want to sell Banco Real. For one, it doesn’t need the money: it’s effectively getting $21 billion from selling La Salle to Bank of America, which solves a lot of its cash issues. And for another, Barclays has demonstrated for decades, with its South African operations, that it is perfectly comfortable with the odd far-flung outpost. Barclays owns a majority stake in Absa, South Africa’s largest retail bank, although South Africa’s central bank governor has criticized Barclays’s stewardship of Absa.

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