The financial sector in Latin America continues to attract attention from buyers both domestic and foreign. Itau Unibanco Holding ( ITUB ) told Estado de Sao Paulo news over the weekend that the bank was looking for targets in Chile, Colombia, Mexico, Peru and possibly the United States.

Financials from these countries with ADR issues are fairly limited to four in Chile and BanColombia ( CIB ) in Colombia. The iShares MSCI Chile Fund ( ECH ) holds equity in six Chilean financials that together account for 12.7% of the fund. The Global X FTSE Colombia 20 ( GXG ) holds 40% of its assets in banks and financial services.

Chile's CorpBanca ( BCA ) was highlighted in a post last November as a target of foreign interest . The bank is the smallest with an ADR issue, but like many companies in the region, is tightly controlled by family ownership.

Rumors of increased M&A activity have been on-again, off-again as headline risk out of Europe has kept many companies from purchases. Scotiabank increased its holding in Colombia's Colpatria to a majority stake last year and stated that there was further interest in expanding the bank's presence in Brazil and Chile.

Talking to reporters at Davos, Itau's CEO Roberto Setubal also commented that while Brazil has been affected by the European crisis, the change in the liquidity policy by the ECB has improved trade recently.

While global risks are set to continue through this year, financials in the region are relatively healthy with strong capitalization. Though acquisitions may not pick up until the second half of the year or later, the trend is toward consolidation.

Itau is a leading private bank in Brazil providing commercial, corporate, and investment banking services. The bank trades for around 11.0 times trailing earnings, in-line with peers, but only pays a dividend yield of 0.4%.

Goldman Sachs downgraded the bank to neutral from buy last Friday.