BTG Pactual: if it’s fixed …


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The bank has retrenched, rebranded and grown since 2015.

Andre Esteves-600
BTG Pactual has been reborn since the arrest of previous CEO André Esteves in 2015.

BTG Pactual’s recovery from a near-fatal bank run in 2015 has been spectacular: indeed, last month the bank won this magazine’s award for the best investment bank in the emerging markets. As an an entity that had always wowed, but had also sparked suspicion about its risk-taking instincts, it has a fresh veneer of respectability and solidity. And those are two very important brand attributes to have in the financial services.

The bank has retrenched and has grown. It has also rebranded into the retail and mass affluent sectors in Brazil, which have provided strong growth in annuities businesses.

This rebirth, since the arrest of previous CEO André Esteves in 2015 over allegations of participation in a corruption scheme, has been managed under the leadership of Roberto Sallouti. And while BTG Pactual, with its almost old-fashioned partnership culture and mentality, has always been driven by a senior management team rather than any individual, Sallouti has been the public face of the bank’s renewed reputation.

That’s why a low-key filing on July 9 by Esteves, who holds 61.55% of G7 Holding, the company that houses the equity of the bank’s big partners – and which in turn holds 57.4% of the voting shares of the bank – is of interest. It’s the first step in getting regulatory clearance from the central bank for his possible return as leader.


There are a couple of points here. First, Esteves was cleared of involvement in the corruption scheme in 2018. Second, as his share-ownership reflects, he was, more than anyone else, responsible for the incredible growth of the bank up to the existential crisis of his arrest in 2015. So why, therefore, shouldn’t he feel fully entitled to resume its leadership?

No one at the bank is going to speak against such a proposition. At least not on the record. But there will be some with misgivings at the prospect of Esteves’ return. There were some who thought the bank brought such key-man risk on itself in its previous incarnation that they wouldn’t wish to return to that position.

And it’s not as if Esteves doesn’t have huge authority and power today. Senior bankers recently joked to Euromoney that its recent good performance “is just going to mean André asks for even more”. The chain of command produced by equity ownership is inarguable.

But, of course, Esteves will be tempted to resume the title of CEO – not just because he will justifiably feel it’s his right, but also as an act of public redemption from the humiliation of incarceration and public accusation. But there is a legitimate question about the broader perception of the bank – will it add to the perception of riskiness? To a material extent?

It’s a question that’s very hard to answer. But if there is any risk at all, perhaps Esteves may be wise to think about the bank’s reputation: if it’s fixed, don’t break it.