* State-run bank wants unit to be market No. 1 - newspaper
* Plan may include listing or joint venture
SAO PAULO Jan 4 State-controlled Banco do
Brasil SA, the country's largest bank by assets,
wants to expand its investment banking unit, either through a
listing or merger with a private sector rival, Valor Econômico
The newspaper quoted a senior executive as saying that while
the plan is preliminary, Banco do Brasil aims to form Brazil's
largest wholesale and investment bank. The move could also make
it easier for the bank to create a brokerage unit, the report
A Brasilia-based spokesman for Banco do Brasil confirmed the
content of the Valor interview with Paulo Roberto Caffarelli,
its senior vice president for wholesale, private and
The spokesman declined to provide further details on the
plan. Caffarelli told Valor that a decision will be made before
the end of the year.
For years, Banco do Brasil could not build a credible,
strong investment banking franchise because it was difficult to
hire and retain senior bankers. In Brazil, state entities have a
cap on salaries, making it harder for them to compete with their
private sector rivals.
"Our only option is to form a team. We have a great team but
we can't poach people from other banks," Caffarelli told the
newspaper. "At the same time the more people we lose to rivals
come from the wholesale banking and capital markets operations."
The creation of a listed company or a joint venture could
"reverse" such situation, Caffarelli told the paper.
Banco do Brasil is mulling selling shares in a newly formed
insurance, retirement and pension division as early as this
year. The division, which was named BB Seguridade, will manage
Banco do Brasil's insurance brokerage and insurance services
units as well as assets it owns jointly with Spain's Mapfre SA
and other partners.
Foreign and local banks are betting on financial and capital
markets advisory as a stable source of revenue as lending growth
in Brazil cools and the government pushes down borrowing costs.