Banco do Brasil Flexes Muscles

Latin America’s biggest bank, Banco do Brasil, is riding high with new lines of international and capital markets business. However, elections may be a spanner in the works.

Talk about Brazilian banks to investors, bankers and the banking industry and the defining theme is credit. The business is growing rapidly, with outstanding credit in Brazil at 1.53 trillion reais in June, up 2.0% in a month and 19.7% in a year, according to data from the Central Bank of Brazil.

Market leader Banco do Brasil (BdB) expects the total market for credit to hit 2.0 trillion reais by December, an increase of 17.7% in just one year. There is plenty of scope for growth. At 45% of GDP, credit in Brazil lags behind other developing nations, Ivan Monteiro, BdB’s CFO tells LatinFinance. Chile has a credit-to-GDP ratio of over 60%.

If credit is the banking battlefield, BdB has been a phenomenally successful army. According to Monteiro, the bank has lifted its market share to 20%, from around 14% before the crisis. In the year to March, the credit portfolio grew 26%, including the contributions from Banco Votorantim which BdB bought in this period.
Since the second quarter of 2009, BdB has been Brazil’s top bank by assets, followed by Itaú, Bradesco and Santander. In the first quarter, it had 22% of the system’s assets, at 710 billion reais, according to data from the central bank and M&A boutique Queluz Gestão de Ativos, making it one of the biggest banks in the world.

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