Bradesco buys outside Brazil to compete within
Move adds offshore platform for private clients; bank argues BAC Florida Bank deal adds to its story as the momentum play in the market.
Photo: Egberto Nogueira / Imã Foto galeria
Bradesco’s first international acquisition was announced this week: the bank has agreed (subject to regulatory approvals) to buy BAC Florida Bank for $500 million.
The acquisition is significant if not substantial; because while adding BAC’s US business won’t move the needle on Bradesco’s wealth management business in terms of assets under management (AUM), it provides important impetus to the international component of private banking in Brazil.
BAC Florida manages $1.8 billion compared with just over R$200 billion ($50 billion) of AUM at Bradesco private bank. However, the changing investment environment in Brazil is speeding up portfolio diversification and Brazilians are increasingly interested in allocating wealth internationally.
Leandro Miranda was head of Bradesco BBI when the investment bank was mandated by Bradesco’s senior management to search for a US wealth management business. Miranda, now Bradesco’s investor relations officer (IRO), told Euromoney that the bank managed to pursue the acquisition without entering a competitive situation.
“We identified three possible targets but we decided to actively pursue just one,” he says. “We approached the bank’s owners [Nicaraguan business conglomerate Grupo Pellas] and the negotiations went smoothly – they were as keen as we were to ensure that the culture and management approach was a good fit.”