Latin America's largest bank in terms of market value, Itau Unibanco Holding SA received tax charges amounting to BRL18.7 billion (USD7.9 billion).

The Brazilian tax agency, Receita Federal levied charges against Itau for its purchase of Unibanco in 2008.  The agency claimed Itau did not reflect the acquisition on its book of accounts as a taxable gain. Itau said it will challenge Receita Federal's charges.  The bank through a signed statement issued by Alfredo Setubal, director of investor relations stated, "The company considers as remote the risk of losing the case, an understanding confirmed by its lawyers and external advisers."

It was considered the biggest Brazilian bank industry deal in 2008 when Itau bought Unibanco for BRL26.7 billion.  To privatize Redecard SA, the country's second biggest card payment processor, the bank spent BRL11.8 billion last year.

Itau's index fell to 1.6% down at BRL29.34.  This was the biggest drop on the Brazilian Ibovespa benchmark index recorded at 12:58 p.m. today.