Euromoney Market Leaders: Brazil’s banks keep busy in 2022
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Euromoney Market Leaders: Brazil’s banks keep busy in 2022

The lively sparring match between Banco Itaú BBA and Banco BTG Pactual says everything about the state of Brazil’s banking sector heading toward 2023. Even as global markets and domestic political uncertainty abounds, the nation’s biggest player and its most profitable are raising their investment banking games at an impressive clip.


Both Itaú and BTG lead the pack in the inaugural Euromoney Market Leaders rankings in the Latin American region, earning top status at a time of unprecedented dislocation across the region.

Latin America’s biggest economy and most populous nation has been heavily affected by a pandemic heading into its fourth year. Even so, officials at both firms led the charge to stay focused on business – and on winning key mandates. Covid-19 disruptions in 2021 didn’t stop the industry from completing a string of initial public offerings and M&A deals.

In fact, the 49 IPOs of Brazilian companies in 2021 marked both record volumes and a sizeable increase from 31 in 2020 and seven in 2019. Notably, many were in the technology-driven financial services space, including Nu Holdings Ltd the fintech sensation’s dual listing in Sao Paulo and New York made banner headlines.

The arrival on the scene of Nubank, which counts Warren Buffett’s Berkshire Hathaway among its backers, sent a clear message that for all the political noise in Brasilia, the nation’s finance sector continues to journey upmarket.

Of course, global IPO activity has slowed to a crawl in 2022 as surging inflation, the most aggressive Federal Reserve tightening cycle since the 1990s and Chinese growth slows sharply. Goldman Sachs’s US equity strategist Ryan Hammond isn’t exaggerating when he says “the market for initial public offerings has frozen this year.”


Brazil, though, faces the added uncertainty of a hotly contested election pitting right-wing President Jair Bolsonaro against leftist leader Luiz Inacio Lula da Silva. Both faced a runoff contest at the end of October with polls suggesting a tighter-than expected vote.

That has banks tracked by Euromoney Market Leaders pivoting more and more toward corporate consolidation deals, particularly in the healthcare and retail sectors. Brazil is home to a growing trend of larger companies achieving growth by acquiring smaller and struggling businesses.

Take Banco BTG, Brazil’s most profitable bank for three years running. While its growing market share in Chile and Colombia garners attention, the bank’s home advantage helped chief executive Roberto Sallouti’s team win a lead role in many large and transformational M&A deals: HapvidaCo’s R$54 billion ($10.2 billion) merger with Notre Dame Intermedica; Companhia Brasileira de Distribuição’s R$19 billion spin-off of Assai Atacadista; B2W Digital’s R$6.2 billion merger with Lojas Americanas; Actis’s R$9.6 billion sale of its 100% stake in Echoenergia to Equatorial.

Banco Itaú racked up its own roster of M&A deals. So did investment banks that earned “Highly Regarded” rankings in Euromoney Market Leaders including Bradesco BBI, BR Partners and Goldman Sachs, the sole overseas name to appear in the list. Those receiving a “Notable” nod include Banco ABC Brazil, Banco do Brasil, Banco Safra, Nordeste, XP and sole overseas name Citibank.

Although the IPO market sits largely idle for now, the corporate banking business is increasingly busy. When he started his stint as finance minister in January 2019, Paulo Guedes pledged a series of reforms to hasten growth by removing regulations. Among those steps: increasing banks’ flexibility to lend to sectors most heavily damaged by the pandemic like airlines and tourism.

[Brazilian banks’ post-pandemic performance has 'exceeded' the team’s expectations,] reflecting diversified business models and sound pre-impairment profit, which acts as a first line of defence
Raphael Nascimento, Fitch Ratings

Banco Itaú, this year’s sole Euromoney Market Leader honoree in the corporate banking category, is an obvious case in point. In 2019, one of Milton Maluhy Filho’s first acts as chief executive was setting up a unit to increase loan issuance to startups. As of October 14, 2022, it has extended R$7 billion of loans.

The initiative helped fill some of the void as capital dries up amid rising global interest rates, falling stock valuations and great uncertainty about what’s in store for 2023. The same is true of Brazil’s enviable stable of Highly Regarded institutions: Banco Bradesco; Banco BTG Pactual; Banco do Brasil; Caixa Economica Federal; and Bank of America among overseas players.

In general, says analyst Raphael Nascimento at Fitch Ratings, Brazilian banks’ post-pandemic performance has “exceeded” his team’s expectations, “reflecting diversified business models and sound pre-impairment profit, which acts as a first line of defence.” The key, Nascimento notes, is for bank executives to pay close attention to how decelerating growth and inflation affect asset quality, costs and profitability and to innovate.


This last imperative seems to have been taken on board, as Euromoney Market Leaders research attests. Few top economies are digitalising with the speed and ambition of Brazil. Brazil is already the largest fintech market in Latin America and fifth largest in the world.

Digital payments alone are driving “profound change,” says Nubank founder and chief executive David Vélez, who calls it a “silent revolution” that’s “led to increased competition, more financial inclusion and lower banking fees.”

Euromoney Market Leaders highlights three banks leading the charge: Bradesco, Bank of America and Santander. Bradesco, for example, has been at the vanguard of innovation, launching a digital bank called Next back in 2017. As of the second quarter of 2022, Next had more than 12.2 million active customers, more than double the number in the prior period. Bradesco has launched an online investment platform called Agora and purchased digital bank Digio.

In September, Bradesco took another bold swing: creating a digital bank in Mexico, Latin America’s second-biggest market and one of the region’s least-banked populations. It is doing so with an acquisition of Mexican financial company Ictineo Plataforma through its subsidiary Bradescard.

Few top economies are digitalising with the speed and ambition of Brazil. Brazil is already the largest fintech market in Latin America and fifth largest in the world

As Bradesco chief executive Octavio de Lazari puts it, the move presents an “opportunity to expand our operation, becoming a digital bank to having a greater presence in a relevant market such as Mexico.”

Bradesco is hardly alone in demonstrating how Brazilian banks are competing to win over customers in consumer banking with an innovative mix of digital offerings and collaborations. Banks ranked Highly Regarded - Banco BTG and Banco Inter - are making great strides in allowing customers to register entirely digitally. So are Notable institutions Banco Itaú, Caixa Economica Federal and XP.

Santander, meantime, is a prime example of a bank harnessing Brazil’s keen digital currency trading and tokenization. Brazil’s central bank is predicted to launch a digital currency in 2024.

In March 2022, Madrid-headquartered Santander became the first European bank to launch a payments product that allows customers to transfer funds in real time into Brazil’s local currency. In August, Brazil chief executive Sergio Rial announced plans for a digital asset trading service. The bank is mulling a tokenization service to harness the blockchain-tech boom. Santander is working with IBM’s blockchain team, incorporating artificial intelligence into its operations and upgrading cloud storage capabilities.

Not to be outdone, in August 2022 BTG Pactual launched a crypto trading platform called Mynt. That same month, XP, Brazil’s biggest brokerage by market value, introduced its own crypto trading platform.

ESG priorities

The Euromoney Market Leaders research team detects encouraging signs in Brazil’s adoption of the environmental, social and governance principles that global investors have prioritized. In September 2021, the Central Bank of Brazil published new rules regulating ESG products and climate risks. They clarified related analysis and risk management procedures for financial institutions, how sustainability affects rural credit dynamics and mandatory disclosure requirements.

Institutions like Banco Bradeso lead the pack according to Euromoney Markets Leader’s metrics. In July 2022, Brazil’s second-biggest bank by market value launched a dedicated unit in its investment-banking operation to advise clients in ESG themes.

Felipe Thut, director at Bradesco BBI, the investment bank controlled by Banco Bradesco, speaks for many when he observes that “demand for those products is growing each day, and firms need to adapt.” The faster the bank helps companies embrace ESG standards, Thut adds, the faster “they can reach a broader base of investors in a bond sale.”

Demand for those [ESG] products is growing each day, and firms need to adapt
Felipe Thut, Bradesco BBI

As of the end of May, the Climate Bonds Initiative estimated that Brazil’s tally of green bond issuance had topped US$11 billion, particularly in agriculture, forestry, transport and bioenergy. “Brazil,” notes Leisa Souza, Latin America head of the initiative, “is an important global exporter and we believe that the sustainable finance agenda can open new frontiers for the country, connecting the supply of green and sustainable products with the purchasing market.”

Ranking among Brazil’s Highly Regarded banks in ESG are Banco BTG and Santander. They are followed by the Notable banks on Euromoney Market Leaders: Bank of America, BR Partners and Banco Inter. Though Brazil has a voluntary carbon market, each has its own tale to tell about the extent to which banks are scrambling to offset emissions and create ESG organisations to get ahead on sustainability.

Naturally, increased financial inclusion is a top priority for Brazil via improved education and training initiatives. So is increasing diversity at all management levels – from new entrants to the executive suite. In this first ranking process for Brazil, Euromoney Market Leaders spotlights three banks as Notable in diversity & inclusion: Banco Bradesco, Santander and BR Partners.

But here, just as with other sectors followed by Euromoney Market Leaders research team, there’s ample evidence that Brazilian banks are working to make the most of a chaotic economic scene. And to raise their competitive games no matter how much noise the global financial system generates.


Euromoney Market Leaders is a new, comprehensive country-level ranking system. Banks are ranked according to eight categories: investment banking; corporate banking; small and medium-size enterprise banking; ESG; Islamic banking; digital solutions; corporate and social responsibility; and diversity & inclusion. Conclusions are based on bank initiatives, case studies, products, specific projects, transaction breadth, individual policies and numerical data and targets. Relevant accreditation such as awards, rankings and ratings are also taken into account. We also look for evidence of creativity, innovation, and significance of market impact based on a universe of quantitative metrics.


Corporate banking: Brazil increased flexibility and removed regulation around lending to sectors most heavily impacted by the pandemic (tourism, airlines). As a result, many of the most significant financings were in those industries.

Diversity & Inclusion: Several banks highlighted their increasing diversity from entry to management levels, but many D&I initiatives seem to centre around education (courses/trainings on diversity).

ESG Banking: Green bonds are becoming more prevalent in Brazil (though still relatively rare). Many banks are offsetting their carbon emissions (Brazil has a voluntary carbon market) and creating ESG organizations. There is a push toward more transparency (in 2021 the Central Bank of Brazil published the first report on Social, Environmental and Climate Risks and Opportunities).

Digital Banking: Banks are competing to win over customers in consumer banking with an array of digital offerings and integration. Most major banks allow customers to register entirely digitally. There is also a big focus on digital currency and tokenization, and Brazil’s central bank is predicted to launch a digital currency in 2024. Brazil is already the largest fintech market in Latin America and fifth largest in the world.

Investment Banking: Brazil was heavily affected by the pandemic, but saw a big increase in IPOs and M&A deals over the last year. There were 49 IPOs of Brazilian companies in 2021 (compared to 31 in 2020 and 7 in 2019). Healthcare and retail were particularly active industries in M&A. There has been a trend of larger companies acquiring smaller/struggling companies in the same industry; many of the deals in 2021 were consolidations.

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