Private banking: Flight to quality boosts Itaú

By:
Rob Dwyer
Published on:

What’s a wealthy Brazilian to do faced with economic and political turmoil, scandal at one of the country’s leading private banks, and a big change to the tax law? Turn to the undisputed market leader in wealth management, it seems.

"In times of crisis investors around the world seek the safe refuge of government bonds, but in Brazil they rush to put their assets in Itaú." 

It’s an old line from bankers at the country’s largest private financial institution, but it seems – as the economy enters its second year of sharp recession – to be true. 

Brazil’s biggest private bank – it enjoys a market share of onshore wealth management of around 27% – is getting bigger. While much of the rest of the industry struggles to retain assets under management, Luiz Ribeiro, head of private banking at Itaú, reported 16% growth in 2015, and many of the bank’s internal records were broken.

"We had our best month of new inflows to the private bank in December 2015," says Ribeiro. "In 2015 we had more than...