UBS, Banco do Brasil Launch Investment Bank
Today UBS and Banco do Brasil signed a binding agreement to establish a strategic partnership that will provide investment banking services and institutional securities brokerage in Brazil and select countries in South America. Clients in the region will have access to M&A and advisory capabilities, debt and equity capital markets, and a broad network of corporates and investors, as well as institutional securities brokerage and research.
Subject to regulatory approvals, the jointly-owned investment bank will combine the strengths of two complementary players with local and global resources. UBS brings a global investment banking division, top-ranked research, a unique data analytics platform, and a securities distribution network with global reach. Banco do Brasil has strong client relationships and local corporate and investment banking expertise, holds a leading position in fixed income capital markets, and has a proven track record of Brazilian ECM, project finance, and M&A advisory transactions.
The new investment bank is expected to be established through the combination of assets from both stakeholders. UBS intends to contribute its operational investment banking platform in Brazil and Argentina, as well as its institutional brokerage business in Brazil. Banco do Brasil intends to contribute the exclusive access rights to its corporate clients. UBS will hold a 50.01% ownership stake and Banco do Brasil 49.99%.
Rubem Novaes, Banco do Brasil Chief Executive Officer, highlighted that, “Banco do Brasil has extensive experience building profitable partnerships. This partnership is in line with our strategy of improving the return for our shareholders and providing sophisticated products to our clients.”
“This transaction captures a unique opportunity to combine two strong partners with complementary strengths,” said Sergio P. Ermotti, UBS Group Chief Executive Officer. “It will also allow us to better serve our clients in Latin America and around the world while unlocking value for our respective shareholders.”
The partnership will leverage the prominent position of UBS’s broker dealer in the region – with its leading position in cash equities, exchange traded derivatives and low latency trading in Brazil – and Banco do Brasil’s capital markets distribution platform. Banco do Brasil’s corporate bankers will work with the investment bank’s professionals to provide clients with a comprehensive portfolio of products and services in Brazil. The investment bank will be fully incorporated into UBS’s Global Banking and Global Markets platforms and will be well-positioned to become the leading player in the region.
“We look forward to working with Banco do Brasil to provide market-leading investment banking products and services to our current and prospective clients in the region,” said Sylvia Coutinho, UBS Country Head in Brazil. “This endeavor is a clear demonstration of UBS’s commitment to expanding our business in South America with a bank that has a strong track record partnering with financial services firms.”
Marcio Hamilton, Banco do Brasil Chief Wholesale Officer, stated, “The partnership with UBS represents a crucial step in Banco do Brasil’s capital markets strategy. Our clients will benefit from the best of both worlds: a local banker that nurtures long-term client relationships and a firm with global expertise and reach.”
Carlos Hamilton, Banco do Brasil’s CFO pointed out that, “The generation of synergies and efficiencies in the banking business is aligned with the main goal of value creation for our customers and shareholders.”
Banco do Brasil and UBS will each appoint three board members. The Chairperson will be appointed by Banco do Brasil, and UBS will appoint the Vice-Chairperson and CEO. Banco do Brasil will also appoint an Officer, that amongst its responsibilities will be in charge of the relationship between Banco do Brasil’s customer base, corporate bankers and the newly formed investment bank.
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