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Banking

BTG extends its retail business with Banco Pan

State-owned Caixa Economica cashes out of its Pan investment with R$2 billion profit.

Caixa-Economica-HQ-Reuters-960.jpg
Caixa Economica Federal's headquarters in Brasilia. Photo: Reuters

BTG Pactual has taken a leap forward in its strategy to expand into retail banking with the buy-out of Caixa Economica Federal’s stake in Banco Pan – its partner in the bank since 2011.

BTG will pay R$3.7 billion for Caixa’s remaining 26.8% stake and 49.2% of voting capital.

The state bank, which also sold some of its stake in Pan in 2019, will register a profit of more than R$2 billion on the equity interest it took in the bank – then PanAmericano – in 2009, as it struggled with the fallout from an accounting fraud.

Caixa had planned to divest its ownership in Pan through a public listing, but the private sale provided a safer route out of its holding amid greater equity market volatility. BTG Pactual paid a premium of 10% over the April 1 share price.

Digital banking

BTG Pactual’s original decision to invest in PanAmericano – with the bank’s retail strategy to focus on the lower-income social groups – predated its move into retail banking, which it has achieved successfully in recent years through its BTG Pactual digital.

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