The financial giant BTG Pactual wants to reach Mexico

BTG has just opened an office in Madrid and in March announced the acquisition of a bank in Luxembourg to serve Latin American clients, as part of its strategy to gain market share from banks that are eliminating their local operations.

JPMorgan Chase & Co., the largest wealth manager for clients in the region, closed its offices in Brazil in 2020 and in Mexico in 2021, ending a decades-long effort to compete locally. BNP Paribas will stop serving domestic clients in Brazil in 2021.

While UBS Group AG’s acquisition of Credit Suisse Group AG will create a wealth manager that will surpass JPMorgan’s volume of Latin American clients, integration challenges may create opportunities for BTG.

“Customers want to be served globally, and not by someone in Latin America who has no idea what’s going on abroad, or by some banker outside the region who has no idea about local life,” Pessoa said. .

BTG, co-founded by billionaire André Esteves, has tripled its US wealth management staff to about 50 people in the past three years, according to Pessoa. The bank has local private banking teams in Brazil, Lisbon, London, Chile, Colombia and Peru.

“We see a large exodus of clients from Colombia, Chile, Peru and Mexico moving to Madrid, or at least staying part of their time there, with the advance of more leftist governments in the region,” he said.

The new BTG office in Madrid is located in the luxurious Salamanca district. That headquarters received around 21.8 million dollars from a Latin American client to be administered, according to Pessoa.

Although Miami remains a major hub for wealthy Latin Americans, the Florida city is considered by many to be too expensive, especially given tax breaks in Spain, he said. The Portugal office, opened in 2020 to serve mostly wealthy Brazilians, manages almost 4 billion euros.

BTG is also awaiting regulatory approval to complete the acquisition of FIS Privatbank in Luxembourg for €21.3 million. The bank, to be called BTG Europa, will serve as a center not only for private banking, but also for corporate and investment banking.

A US bank owned by BTG would allow the company to compete with companies such as Banco Bradesco, which completed the acquisition of a bank in Florida in 2020 and now offers mortgages and personal loans and holds deposits from mainly Latin American clients living in South Florida. Florida. The second and third generations of wealthy families who have relocated to the US for most of the year are also potential customers for a wide range of banking activities, Pessoa said.

In Brazil, BTG’s private banking is also growing, and it has doubled its team since 2019, he said. The company plans to reopen its office in Ribeirão Preto, São Paulo, on Thursday, to serve clients in the agribusiness sector. BTG already reaches these clients through offices in Campo Grande, and also plans to relaunch an office in Brasília later this year.

The bank plans to open a new office in Itajaí, near the city of Balneário Camboriú, Santa Catarina. That is one of the main getaway destinations for the country rich and local industrial entrepreneurs.

“This office will have to be open on weekends and it will be crazy in the summer,” Pessoa said.

Heritage is increasing in the agricultural regions of Brazil. The sector’s gross domestic product grew nearly 22% in the first quarter from the same month a year ago, including a record soybean crop for the season. Crops such as coffee and corn are also expected to hit all-time highs.

While the overall private banking market expanded 1.2% to 1.88 trillion reais ($392 billion) under management this year through April, wealth in the Midwest region, the so-called Brazilian Texas due to its agribusiness strength , rose 10% to 53 billion reais, according to the Brazilian Association of Capital and Financial Market Entities, or Anbima.

In March, BTG had 568 billion reais in assets under management, up 24% from the same month in 2022, according to its financial statements. The goal is to grow more than 30% this year, Pessoa said.

Pessoa, a 54-year-old from Rio de Janeiro, has led BTG’s private banking and wealth management unit since 2014, and now oversees a team of around 300 people. He has been with the company since 1998, when it was called Banco Pactual SA.

When asked what gift BTG had given him for his 25th anniversary at the company, he said: “a European bank to build”.