Itau Unibanco Holding S.A. ITUB has inked a deal to sell its group life insurance business to Prudential do Brasil Seguros de Vida S.A, a subsidiary of Prudential Financial, Inc. PRU.
Announcing the deal on Monday, the Brazilian banking giant stated in a release that the sale of the life insurance business which is mainly operated through brokers, is not likely to materially impact the results of Itaú Unibanco in 2016.
Notably, the group life insurance operation has earned net premiums of around R$ 465 million in 2015 and over 1,900,000 lives were insured.
Financial terms of the deal remained undisclosed. Following the fulfillment of customary closing conditions and regulatory approvals, this transaction is expected to be finalized in first-half 2017.
Prudential do Brasil – one of the largest individual life insurers in Brazil – will be able to further strengthen its business through this acquisition.
For Itau Unibanco, the offloading of the insurance business comes in line with its strategy “to focus on mass-market insurance products that are typically related to retail banking”.
Amid the stressed conditions in the Brazilian economy, Itau Unibanco remains focused on sustaining growth with expansion of operations in Brazil and abroad. In April this year, the company completed the merger of its Chilean operation with CorpBanca, which led to the formation of one of the largest banks in Latin America.
Currently, Itau Unibanco sports a Zacks Rank #1 (Strong Buy). Some other favorably placed stocks in the foreign banks space include Grupo Financiero Galicia S.A. GGAL and Banco Macro S.A. BMA, both sporting the same Zacks Rank as Itau Unibanco. You can the complete list of today’s Zacks #1 Rank stocks here.
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