SAO PAULO, Sept 24 (Reuters) - SoftBank-backed digital
lender Banco Inter SA and payments company StoneCo
Ltd are in preliminary talks to expand a current
partnership agreement, including a potential merger, one source
familiar with the matter said.
StoneCo acquired a 4.99% stake in Banco Inter in June, as
part of a strategy of attracting the bank's clients to its
The talks are the latest sign of stepped-up dealmaking
involving a new breed of financial companies that have emerged
as rivals to Brazil's once-dominant traditional lenders.
The current talks come as StoneCo faced a 400-million-real
($75 million) loss in its newly-launched lending operation due
to higher provisions.
If StoneCo and Banco Inter agreed on a merger, it would
create a financial institutional with a market capitalization of
roughly $22 billion.
Both U.S.-listed Stoneco, which has a market value of $12.5
billion, and Banco Inter, with a $9.8 billion market cap, said
they do not comment on rumors.
Under their existing partnership, Inter offers Stone's
processing services to its clients and merchants who use Stone
to process credit and debit cards are being offered connections
to Inter's nascent online marketplace. It was unclear what a
deeper partnership absent a merger might involve.
Brazilian newspaper Valor Economico reported earlier on
Friday on the talks.
Shares in Banco Inter were up 0.8% in early afternoon
trading, after rising more than 4%, while shares in StoneCo were
($1 = 5.3365 reais)
(Reporting by Carolina Mandl, additional reporting by Tatiana
Bautzer; Editing by Emelia Sithole-Matarise and Nick Zieminski)