* Santander Brasil is not for sale, Portela tells Valor
* Says bank might sell small stake to meet float rules
* Comes after speculation of a potential sale to rival
SAO PAULO, May 30 (Reuters) - Banco Santander Brasil , Brazil's largest foreign lender, is not for sale, Chief Executive Officer Marcial Portela Álvarez told Valor Econômico newspaper, seeking to put a end to weeks of speculation on the matter.
Spain's Banco Santander, which controls about 76 percent of its Brazilian subsidiary through a series of holding companies, has no intentions to exit Brazil or sell either a strategic or a minority stake to a rival, Portela told Valor in an interview published on Wednesday.
"There is not any negotiation in course to sell the bank, and the controlling shareholder has no intentions to sell either," he added. Santander Brasil is also Brazil's third-largest private sector lender.
Calls made to Santander Brasil's press office in São Paulo were not immediately answered.
In recent weeks, local media reported, citing unnamed sources, that Santander Brasil was in talks with potential bidders for a strategic stake, a move that would have allowed its parent company to raise capital to cover losses in Spain -- the group's home market.
"Our goal is to grow locally, not to sell," Portela added. Santander Brasil accounts for about 27 percent of the Spanish bank's annual profit.
Agência Estado and other news outlets mentioned state-controlled Banco do Brasil, the nation's largest bank, and Banco Bradesco, Brazil's second-biggest nongovernment bank, as likely bidders for Santander Brasil.
Both Banco do Brasil and Bradesco have denied "categorically" being engaged in any type of negotiations to buy all or part of Santander Brasil.
However, Portela told Valor that a sale of a 2 percent to 3 percent stake in Santander Brasil could take place at some point, in order to meet rules that stipulate a minimum threshold of 25 percent stock float for companies listed in the São Paulo Stock Exchange's Novo Mercado section.
Such a stake sale, which Valor estimated at about $600 million, is more likely to take place through a private placement, Portela told Valor.
Currently Santander Brasil's stock float is about 23 percent. A small placement equivalent to a 0.6 percent stake should take place before October, to meet bourse rules.
$1 = 1.99 Brazilian reais Reporting by Guillermo Parra-Bernal Editing by W Simon