Participação em matéria do New York Times (23/09/2013): In Latin America, Brazilian Banks Fill Void Left by Global Giants
Upcoming SlideShare
Loading in...5
×
 

Participação em matéria do New York Times (23/09/2013): In Latin America, Brazilian Banks Fill Void Left by Global Giants

on

  • 289 views

 

Statistics

Views

Total Views
289
Views on SlideShare
289
Embed Views
0

Actions

Likes
0
Downloads
0
Comments
0

0 Embeds 0

No embeds

Accessibility

Upload Details

Uploaded via as Adobe PDF

Usage Rights

© All Rights Reserved

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Processing…
Post Comment
Edit your comment

Participação em matéria do New York Times (23/09/2013): In Latin America, Brazilian Banks Fill Void Left by Global Giants Participação em matéria do New York Times (23/09/2013): In Latin America, Brazilian Banks Fill Void Left by Global Giants Document Transcript

  • 09/10/13 In Latin America, Brazilian Banks Fill Void Left byGlobal Giants - NYTimes.com dealbook.nytimes.com/2013/09/23/brazilian-banks-fill-a-void-left-by-the-global-giants/?pagewanted=print 1/3 SEPTEMBER 23, 2013, 5:24 PM In Latin America, Brazilian Banks Fill Void Left by Global Giants By DAN HORCH SÃO PAULO, Brazil — The erratic performance in Latin American markets in recent months is leading some global banks to shy away from volatile regions and rethink their strategies. But for investment bankers based here, their home market is a growth market. As Wall Street-based firms retrench, local Latin American bankers are ready to jump in to fill the void. Roberto Sallouti, chief operating officer of BTG Pactual, said the current trend was similar to what happened during the 2008-9 financial crisis, when many global banks pulled back from Latin America and left space for local firms to grow. “The other guys are still there,” Mr. Sallouti said, “but we are eating into their market share.” While the Latin American economies are not as robust as they once were, the region generated over $1.6 billion in investment banking fees last year, according to Freeman Consulting Services, an investment banking advisory firm based in New York. The devaluation of local currencies relative to the dollar means that it is now cheaper for foreigners to invest in the region, which has rich natural resources and a growing middle class. “For the deals to come through,” Jean-Marc Etlin, chief executive of Itaú BBA’s investment banking division, said, “all you need is a bit of stability.” Just a few years ago, American and Western European banks dominated in investment fees, garnering around 74 to 79 percent of the market share from 2002 to 2006, according to Freeman Consulting. In 2007, their share fell to 66 percent, and last year it was 60 percent. Already, there have been noticeable signs that Wall Street’s presence is less pronounced. Goldman Sachs acknowledged in August that it was reducing its Brazil staff and subletting one of the four floors in its São Paulo office, though a spokeswoman said the firm was still highly engaged in Latin America and was expanding operations in Chile and Mexico. Barclays and Raymond James have also acknowledged scaling back operations in Brazil. Earlier this year Brazilian newspapers reported cutbacks at Deutsche Bank’s and Morgan Stanley’s investment banking units, although these two banks declined to confirm these cuts. Eric Wasserstrom, managing director of equity research at SunTrust Robinson Humphrey
  • 09/10/13 In Latin America, Brazilian Banks Fill Void Left byGlobal Giants - NYTimes.com dealbook.nytimes.com/2013/09/23/brazilian-banks-fill-a-void-left-by-the-global-giants/?pagewanted=print 2/3 in New York, said stricter regulatory requirements in their home countries and, for some banks, a lack of capital, is obliging many European and American firms to exit some emerging markets to concentrate on others. “They used to have the capital to do it all. Today they have to be more selective,” Mr. Wasserstrom said. That is not to say that locally based investment banks are having a flood of new business. Many companies still prefer the global banks, which have offices and relationships all over the world. Brazilian investment banks have tried to counteract that by opening offices in London, New York and several Asian capitals. But their network outside Latin America still “does not compare” with that of the global banks, said Andre Riva Gargiulo, senior Brazilian banking analyst at the São Paulo office of Grupo Bursátil Mexicano, a Mexican brokerage firm. Therefore, many companies prefer a global bank as lead underwriter for bigger offerings, but go to local banks for smaller deals or those that target investors in Latin America, he said. Despite this handicap, two banks, Itaú BBA and BTG Pactual, are making inroads in displacing global banks when competing for stock listings, merger advice or bond offerings. So far this year, BTG Pactual has had the largest share of stock market offerings in Latin America, $2.96 billion, followed closely by Credit Suisse with $2.91 billion and Itaú BBA with $2.89 billion, according to data from Dealogic. Citigroup and JPMorgan Chase were fourth and fifth in the rankings. Ten years ago, there was not a single Latin American investment bank in Dealogic’s top five for the region. Although most of their business comes from Brazil, their home country, BTG Pactual and Itaú BBA are increasingly winning business elsewhere. Brazilian investment banks’ share of fees in Chile from stock and bond issuance rose from zero in 2009 to 24 percent so far this year, according to Freeman Consulting. In Colombia, the Brazilians’ share rose from zero to 10 percent over the same period. With other major Brazilian investment banks like BB Investimentos and Bradesco BBI focused on their home market for now, this international business is going almost entirely to BTG Pactual and Itaú BBA. Itaú BBA helped structure a $850 million bond issue in April from the Peruvian pipeline company TGP alongside global banks including Citigroup and Morgan Stanley. When the Mexican real estate investment trust Fibra Shop held an initial public offering in July that raised $437 million, the two international underwriters were Bank of America Merrill Lynch and BTG Pactual, which was also the international coordinator. A Fibra Shop spokesman said the firm chose BTG because it wanted to attract foreign investors not only in the United States, but also in South America, especially Brazil and Chile. The two rival Brazilian firms, which face each other across a boulevard in Brazil’s financial
  • 09/10/13 In Latin America, Brazilian Banks Fill Void Left byGlobal Giants - NYTimes.com dealbook.nytimes.com/2013/09/23/brazilian-banks-fill-a-void-left-by-the-global-giants/?pagewanted=print 3/3 Copyright 2013 The New York Times Company Privacy Policy NYTimes.com 620 Eighth Avenue New York, NY 10018 capital, São Paulo, have been fiercely competing for this business. BTG Pactual is growing through acquisitions. Last year, the bank spent $600 million to buy Celfin Capital, a Chilean investment bank and brokerage firm that is also active in Peru and Colombia, and another $52 million to buy the Colombian brokerage firm Bolsa y Renta. Itaú BBA, which has a growing commercial banking operation in South America, is seeking investment banking clients among its corporate lending customers. And since 2012, both Itaú BBA and BTG have lured senior Latin American investment bankers away from firms like Morgan Stanley and Merrill Lynch. Although the two banks’ paths are different, the goal is the same: to become regional powerhouses. Mr. Etlin said strengthening Itaú BBA’s Latin American operations was a logical choice, despite the current volatility of the region’s markets. “We don’t have the option or the luxury of looking at the whole world and deciding where to put our efforts,” Mr. Etlin said. “This is it for us.” While Brazil is Latin America’s largest economy, the nation alone is not going to provide enough growth opportunities. Brazil’s economy grew only 0.9 percent last year, and forecasts say it will struggle to rise 2.5 percent this year and next. Recent street protests and erratic government policies have also sapped investor interest in the country. Brazilian firms are expanding elsewhere in part because their home market “is growing slowly and is extremely competitive,” said Jõao Augusto Salles, financial sector analyst with the investment consulting firm Lopes Filho in Rio de Janeiro. The economies of Chile, Colombia and Peru are all projected to grow more than 4 percent this year, and their governments trumpet pro-business philosophies. Both Itaú BBA and BTG Pactual also say Mexico is attractive despite slow growth there this year. Mr. Sallouti of BTG Pactual said that the expansion in the region was “an inevitable trend.” But he cautioned that Latin America, whose governments often protect local markets, still had a long way to go to achieve a unified financial system.