Achievements in Banking, Latin America 2008
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Achievements in Banking, Latin America 2008

Bradesco (Brazil)

While many institutions were retreating from cross-border investments and partnerships in September, Brazil’s Bradesco was moving in the opposite direction, looking to greater internationalization of its banking business. In mid-September it joined the Connector network, a corporate cash management agreement between 13 banks in 30 countries from the UK to Australia. Members include Lloyds TSB, Wells Fargo and Dresdner Bank. 

Even though Bradesco’s traditional focus has been on its domestic retail market, Brazil’s largest private bank has increasingly expanded its international activities in recent years, starting with its own brokerage house in London.“We visited Dubai as part of a BRICs [Brazil, Russia, India and China] tour, and we saw there was a lot of interest from investors,” Marcio Cypriano, CEO of Bradesco tells Emerging Markets. The result was that two other brokerage houses are to be launched in Tokyo and Hong Kong by the end of the year.

While Bradesco goes on the offensive abroad, it also stands as an excellent example of how some Brazilian banks, faced with greater international competition as markets open up both at home and abroad, have remained ahead of their foreign competitors. 

During the first half of 2008, Bradesco registered net earnings of 3.9 billion reais ($2.4 billion), an 11% increase over the same period in 2007 with a return on equity of 27.2%.

Bradesco is Brazil’s largest banking group with assets of 348 billion reais (around $205 billion) at the end of the first half of 2008. “We have adopted a successful strategy, and the market has acknowledged that. We are the bank with the highest market capitalization in Latin America, and the most valuable brand including all sectors in Brazil,” says Cypriano. 

He sounds confident in the midst of the global storm: “There will be no contagion from the problems that are happening outside Brazil,” Cypriano told Emerging Markets in early September. “There have been extreme challenges over the past 10 years, but the basis of stability has been set up,” he says. “The Brazilian financial system is solid. We have been very cautious, and we did not get involved in highly risky deals, which is why we can feel comfortable.”

Cypriano reckons that his banks’ clients may even increase their business with him, as the equity and bond markets are suffering. During the 12 months to end of June, Bradesco increased its credit portfolio by 38.8% compared to the previous year, including a 42.9% surge in corporate credit and a 47.2% jump in loans to small and medium-size businesses. It also revised its 2008 forecast upwards: loans to large companies are expected to increase between 22% and 30% compared to last year. 

Bradesco has boosted its corporate and investment banking activities in recent years. “Retail banking has always been our bread and butter, but we have pursued a segmentation policy since 1999, starting with the setting up of the corporate division, the private banking arm, our ‘prime division’ for the high-income population, and later ‘Bradesco Empresas’ which is dedicated to the middle market for small to medium-sized enterprises,” he says. “Retail banking is only a starting point.” 

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