The new shines bright in Brazilian banking
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The new shines bright in Brazilian banking

Investors expect a radical transformation in Brazilian financial services in the next five years: this enthusiasm is depressing incumbent stocks while driving strong valuations for start-ups.


Banco Pan is set to sell up to R$1.35 billion of shares this week – and it appears to have timed the transaction to perfection.

The deal is technically a follow-on but, given the structural changes to the company and the illiquidity of the float, bankers are calling it a “re-IPO”. The bank – mainly owned by BTG Pactual and Caixa – is raising capital to fund a digital expansion that is driving its repositioning as a full service bank to lower-income segments in Brazil.

“This is a great time for financial services companies with growth stories to do follow-ons or IPOís, which is the case with Banco Pan,” says a capital markets banker in the financial services industry group at an international bank away from the deal.

“The [Banco Pan] deal is essentially launching a new company to the market and it’s a great story for investors – it has the right executives, the right entrepreneurs, they have deep pockets and they are trying to solve a big problem. But above all it has the most important ingredient for investors – the bank is going after a huge potential market, or total addressable market,” he says.

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