By Rogerio Jelmayer

SÃO PAULO--Brazil's second-largest bank by assets, Itau Unibanco Holding SA (ITUB3.BR), completed a deal to gain full control of its joint venture with Banco BMG for 1.46 billion reais ($446 million).

Itau--which created the joint venture, called Itau BMG Consignado, in 2012 to focus on lending services linked to automated payroll deductions--acquired the 40% stake in Itau BMG Consignado it didn't already own. The stake had been valued at BRL1.28 billion in September, when Itau announced the deal. It didn't disclose the reason for the increase in deal value.

As of Nov. 30, Itau BMG Consignado had a 28.1 billion reais loan portfolio, representing less than 5% of Itau's loan portfolio, which ended at 605.7 billion reais in the third quarter ended September.

Itau said the transaction won't have a material impact on its quarterly results.

Itau BMG Consignado specializes in lending to customers who hold payroll accounts. Installments on loans made to such customers are deducted automatically from their accounts, which in turn are replenished by monthly salary deposits from employers. Such customers are among the lowest-risk borrowers in Brazil.

The need to seek low-risk segments of the banking market has become more apparent in recent months as nonperforming loan rates increase amid the country's deep recession.

Write to Rogerio Jelmayer at

(END) Dow Jones Newswires

December 29, 2016 05:24 ET (10:24 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.