The Swiss bank announced a strategic alliance with Banco do Brasil and unveiled UBS BB Investment Bank as well as the leadership team that will spearhead the new venture.
Headquartered in Brazil (Sao Paolo), one of the most developed markets, UBS BB is positioned to target Latin America though main geographies of focus will be Argentina, Chile, Peru, Paraguay, and Uruguay.
The bank will enable clients to access mergers and acquisitions, advisory capabilities, debt and equity capital markets, a network of corporates and investors, as well as institutional securities brokerage and research.
We would like to become one of the main players in this sector
The leadership team will comprise of Daniel Bassan (pictured), chief executive officer, Sylvia Coutinho, vice chairman and board member, and Hélio Magalhães, chairman of the board.
“Banco do Brasil possesses vast knowledge of the Brazilian market and both banks can benefit from each other in terms of client reach,” said Bassan.
In terms of products, the bank will mostly focus on CRAs (certificate of agribusiness receivables) and FIIs (Fundo de Investimento Imobiliário or Brazilian real estate investment funds). However, structured products are part of the new entity’s growth plans in the region.
“There's a huge potential market for these types of products,” said Bassan. “We would like to become one of the main players in this sector and I think that in the future, we will continue to expand our presence.”
According to Bassan, the scope for growth in this market is significant as the Brazilian structured products market still has “a lot of room to grow and is very well positioned given the retail platforms on offer”.
“Banco do Brasil happens to be one of the largest banks in retail and always had a very good team for structured products,” said Bassan, adding that the goal is to grow together with the market as it is just in the beginning stages.
“With the interest rate levels that we have today, investors will keep looking for alternatives and hope to get a better return with a structured product,” he said.
The initial announcement of the new venture took place in November 2019 and was established via the combining of assets after regulatory approvals. UBS will hold a 50.01% ownership stake while Banco do Brasil will have 49.99%.
The Brazilian market is dominated by Banco XP which has a 40.6% market share across 123 products worth BRL1.4 billion (US$272m), YTD. The bank was launched by brokerage firm XP Investimentos at the end of last year as a multi-purpose bank with a licence to carry out commercial banking and investment activities.
Most active players in the Brazilian market are foreign providers including Morgan Stanley, Credit Suisse, BNP Paribas, Santander, Goldman Sachs and Citi with only two other domestic banks involved in the market – BTG Pactual and Banco Itau.