BDORY Banco Do Brasil SA (PK)

SÃ O PAULO—Brazilian banking giant Itau Unibanco Holding SA is in advanced talks to acquire Citigroup Inc.'s consumer-banking operations in Brazil, according to three people close to the talks.

Itau and Citibank are holding exclusive talks, said one person, who noted that a deal could be reached and announced in the next few days or weeks. The person did not describe a possible price.

Citigroup in February said it was planning to sell its consumer operations in Brazil, Argentina and Colombia.

Earlier this year, the head of Banco Santander Brasil, the Brazilian unit of Spain's Banco Santander SA, said the Spanish bank was interested in Citi's operation in Brazil.

"The proposal made by Itau was better and then [Itau and Citi] started exclusive talks," said another person.

On Sept. 22, Itau confirmed that it was in talks with Citi.

Citi has long struggled to compete in Brazil because of high costs associated with operating in the South American country and what insiders have called a weak strategy for dealing with the country's compliance quirks.

Brazil's banking industry is highly concentrated among five banks: Itau; Banco Bradesco SA; Santander; and government-owned giants Banco do Brasil SA and Caixa Econô mica Federal. Together they control almost 70% of the assets in the Brazilian financial system.

Citi's business in Brazil has just 1% of the financial system's assets, according to central-bank figures.

Write to Rogerio Jelmayer at rogerio.jelmayer@wsj.com and Luciana Magalhaes at Luciana.Magalhaes@wsj.com

(END) Dow Jones Newswires

October 05, 2016 15:55 ET (19:55 GMT)

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