UPDATE 1-Banco do Brasil denies it is buying stake in Plural
SAO PAULO Oct 15 (Reuters) - State-run Banco do Brasil SA denied a report on Tuesday that it is in talks to buy a 49 percent stake in local investment banking firm Brasil Plural Banco Multiplo, saying it will instead build its investment-banking unit organically.
Veja magazine reported in its online edition that negotiations between the two banks were underway, without disclosing details or saying where it got the information. Efforts to reach Brasil Plural Banco Multiplo were not successful.
In a May interview with Reuters, Paulo Rogério Caffarelli, senior vice president for wholesale and private banking and international operations at Banco do Brasil, said the bank aims to strengthen sales and trading, mergers and acquisitions, advisory and credit, as well as equity research capabilities.
Plural was founded in 2010 by former partners of Grupo BTG Pactual SA, Latin America's largest independent investment bank. Plural, based in Sao Paulo, is led by Rodolfo Riechert and Andre Schwartz, both seasoned dealmakers who worked for BTG's predecessor, Banco Pactual SA, during most of the past decade.
Banco do Brasil is currently in talks with Banco Votorantim SA, of which it holds 49.9 percent of capital, on forming a specialized banking unit. The banks temporarily suspended those talks a few months ago.
Unlike counterparts in other emerging markets such as China, Brazilian investment banks have consistently bested their foreign rivals over the past three years at funding deals, forging stronger client ties and setting up distribution networks similar to those of global banks.
Banco do Brasil has lacked a specialized unit in that segment for years, partly because of pay and bonus restrictions facing state-run entities. It has considered two options to build a unit: through acquisitions or organic growth.
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