Banco do Brasil and Banco Bradesco have entered into Memorandum of Understanding (MOU) to integrate their credit card business and establish a new holding company in Brazil.

Under the agreement, both firms will partially integrate their credit and debt card operations; launch a Brazilian brand for credit, debt and pre-paid cards for account and non-account holders; form a new businesses for private label cards (cards offered to non-account holders costumers through retail partners); create a company to sell cards for specific groups of non-account holders; transfer of shares owned by Banco Bradesco and Banco do Brasil or their subsidiaries in CBSS (Visa Vale), to a new company to be created.

With the newly created holding company, the banks plan to generate synergies, to structure new private label and other related businesses, and to build up a new business model aiming at distributing cards under a new national brand.

Moreover, the banks are studying the possibility of transferring their shares held in Cielo, to a new company to be created, observing the interests of controlling shareholders, the requirements of Bovespa’s Novo Mercado and the Cielo’s bylaws.

The completion of the transaction is subject regulatory and legal procedures.