guide

Transcription

guide

NEW
LON
The 2010 Euromoney Guide to Private Banking in Latin America
In association with Itaú Private Bank
CONTENTS
LUX
LISB
TOK
HON
> Overview: Brazil breeds a new generation of investors
3
> Interview: Celso Scaramuzza - emphasis on partnership
5
> Interview: João Luiz de Medeiros – the international perspective
8
> Latin America - speaking their language
11
> Latin America - Southern Cone partner
17
> Europe - the European connection
19
> Contacts
21
This guide is for the use of professionals only. It states the
position of the market as at the time of going to press
and is not a substitute for detailed local knowledge.
Euromoney Institutional Investor PLC
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Directors: Padraic Fallon (chairman and editor-in-chief),
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Cohen, Christopher Brown, J P Williams, John Botts,
Colin Jones, Simon Brady, Tom Lamont, Gary Mueller,
Diane Alfano, Mike Carroll, Christopher Fordham, Jaime
Gonzalez, Jane Wilkinson
Editor: Sarah Minns
Director of research guides: Mike Carrodus
Printed in the United Kingdom by: St Ives, Roche, UK
© Euromoney Institutional Investor PLC London 2010
Euromoney is registered as a trademark in the United States and the United Kingdom.
OVERVIEW
3
Brazil breeds a new generation
of investors
Brazil’s rapid economic growth in recent years has created
a new class of private banking clients with money to
invest in developing new businesses. Banks with intimate
knowledge of the domestic market will be sought-after
partners
A
n extended period of political
stability and economic growth
has transformed perceptions
of Brazil. With GDP forecast to
grow this year by 7% or more, the third
highest GDP growth rate of any country,
Brazil is now the world’s eighth largest
economy with the fifth largest population.
And the level of wealth creation over
the past seven years has had a number
of profound effects on the country and
on its attractiveness as an investment
destination for both domestic and
international capital flows.
The rising tide of affluence has floated
all boats. At one end of the spectrum,
economic growth has lifted millions from
poverty. In 2004 there were around 61
million Brazilians in the lowest economic
class; in 2010 there are just 33 million. Real
wage growth has averaged 3.39% between
2003 and 2009. The formal economy is
taking an increasing share of overall activity
with 2.1 million jobs created in 2009 alone.
Unemployment is down from 12.3% in 2003
to 7.2% in 2009. And the country’s banks
have made great progress in attracting the
unbanked into the banking system with
innovative measures targeted at those on
lower incomes.
At the other end of the scale, the level
of wealth creation has catapulted the
country into the top 10 in terms of
millionaire households. With estimates
of annualized growth in the private
banking market running at 30%, it is
clearly an attractive market for providers
of wealth management services and there
is a new generation of clients in need of
sophisticated and specialized advice. And
these clients have different priorities to
their more traditional predecessors.
Wealth seeking opportunities
Both in Brazil and elsewhere, the primary
objectives of most wealth management
“Volumes are returning because
fund managers are trading more as
assets under management grow,
and corporates are more active due
to the recovery in world trade.
4
OVERVIEW
mandates have been capital preservation,
tax planning and, in some markets,
offshore banking to protect against volatile
domestic economies. In Brazil at least, this
The more attractive investments
are in new business development,
real estate development and
private equity investment, in which
private banks are increasingly
expected to participate as partners
rather than simply as advisers”
has begun to change. The opportunities
presented by the booming domestic
economy, and the fact that the majority of
those opportunities are in new business
creation and the real sector rather than in
financial assets, have persuaded private
banking clients to seek out new investment
strategies.
The public equity markets are, relative to
GDP, modest in size and limited in scope.
With relatively low interest rates, vanilla
fixed-income investment strategies are
low return. There is still a shortage of
more structured and tailor-made products.
And the investment regime in Brazil is
still relatively complex, with restrictions
and tax-based disincentives on a range of
products and especially on investments
abroad. The more attractive investments
are in new business development, real
estate development and private equity
investment, in which private banks are
increasingly expected to participate as
partners rather than simply as advisers.
Expertise trumps scale
This trend towards what is effectively
private investment banking will have
a significant effect on the wealth
management market as it will play into
the hands of those institutions that can
harness domestic investment banking
expertise with their private banks. It also
emphasizes expertise over scale, opening
the way for increased competition between
the larger players and the more specialized
boutiques.
Foreign players may well find the new
market difficult. The old distinction
between foreign and domestic players,
that the former offer the best offshore
and the latter the best onshore services,
has disappeared. And the offshore market
has, in any case, diminished in importance.
This has left the foreign banks having to
compete in the onshore market where
they have no comparative advantage and,
now, somewhat tarnished brands. And
in the offshore markets local players, in
particular Banco Itaú and to a lesser extent
Banco do Brasil, have developed attractive
offerings of their own. At present, foreign
institutions are investing in the market but
with little outward evidence of significant
progress.
INTERVIEW
Celso Scaramuzza - emphasis
on partnership
Celso Scaramuzza, head of private banking at Banco Itaú
explains how Brazil’s private banks are responding to the
demands of clients who want to put their money to work,
not just preserve their capital
How would you describe the Brazilian
private banking market?
The private banking market in Brazil
is growing dramatically. We are seeing
growth rates of 25% to 30% per annum
in assets under management, with most
of the growth coming from the onshore
market. The booming M&A market is
creating many new clients and a new
generation of wealth creators. With
economic growth this year of anything up
to 8% and the expectation of mediumterm general economic stability, this
market is no longer a fight for a share of
existing portfolios, it is an opportunity to
develop products and services for a new
group of sophisticated investors eager to
put their money to work, not simply to
protect their capital.
Is this growth coming from any particular
area or is it across Brazil?
Growth is coming not just from the
traditional geographies, São Paulo
state, for example - it is country-wide.
It is also across sectors. Agro-industry is
experiencing explosive growth; the airline
business too. Today we have executives in
São Paulo, Rio de Janeiro, Belo Horizonte,
Curitiba, Porto Alegre, Recife, Salvador,
Goiania and now in Ribeirão Preto. We are
covering nine states though if you consider
areas such as Mato Grosso and the north
this could rise to 15.
Celso Scaramuzza, head of private banking at
Banco Itaú
How do these new clients differ from
their predecessors and how do the banks
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INTERVIEW
have to change their offerings to attract
them?
In one sense, they do not differ: there are
those who have inherited wealth and there
are those who have made new money.
But the difference is that in both cases
now they are entrepreneurial and looking
for new opportunities to invest in Brazil.
They understand the country’s potential
and they are not content with wealth
preservation - the traditional preoccupation
“Differentiation is the name of
the game, even in the traditional
private banking market”
of our private banking clients. In addition,
this new generation wants to make its
money grow outside the financial markets
and in ways that actively help the country
develop. So putting money into the bank is
not good enough; they want to take risks;
they want to start new companies.
For the banks this means a change in
emphasis, in products and in services.
What is important now is private equity,
real estate investment and trading advice,
advice on how to set up companies, advice
and execution on M&A and corporate
financing. Increasingly clients are looking
for a partnership with us rather than simply
a set of products. Essentially they are
demanding what you might call private
investment banking services and this is a
big change.
This implies a merging of the services
of the private bank with that of the
investment bank?
Exactly. We need to anticipate liquidity
events; we need to propose solutions
to capital structure issues before they
become apparent; we need to be able
to provide investment banking-type
solutions. Our private bank is already
working closely with Itaú BBA, our
investment bank, to provide this new
service. We started the service around
six months ago and we already have
30 deals in the pipeline and more than
15 mandates, representing a potential
of R$20 million in revenues. The most
important point in each of these potential
deals is that the private bank brought
the idea to the client and that it was the
private banker who was the differentiator,
in this case acting as a corporate financier.
That is the change: these conversations
with clients are strategic, they are not
product-oriented. We want the clients
to say, “these Itaú private bankers are
different; they tell us how to grow our
business, not sell us standard financial
products”.
Is this a difficult transition for the private
bank?
It is a challenge for all of us. We need to
take a holistic view of the client. We face
new competitors for this kind of business.
We might need to co-invest with the client
to show our commitment. These are not
traditional private banking products but
we are confident we are already developing
the kinds of services these new clients
demand.
How do you go about providing these
services?
We are convinced that private banking is
changing and that the model for the new
generation is changing. So beyond the
answer, “the private bank in partnership
INTERVIEW
with the investment bank”, I would say
that the private banker will stop being the
only point of contact in the relationship
and instead the technology interface
will become key. Information technology
will replace the single phone call to the
single private banker. The banker will be
responsible for this strategic support to
the client providing advice and ideas, but
will be supported by technologies such as
web and mobile.
What about the traditional products and
services? You will have to continue to
offer these as well?
Yes. We have to maintain and improve
the quality of our implementation of
existing products and services while at
the same time another team works on the
new initiatives - it’s a big development
programme. In the traditional product
areas our focus is on quality but also on
innovation. We have developed a range
of new treasury products as well some
more highly structured notes linked to
alternative asset classes such as real
estate and private equity.
Clearly, with rising interest rates, in the
short term there is a possibility that
Brazilian clients will be tempted to go
back to more plain-vanilla fixed-income
products. To ensure that they have the
best possible selection of investments
we need to improve our fixed-income
offerings and to come up with new ways
for clients to express more sophisticated
views. For example, for clients who do
not believe that interest rates will rise
as much as the futures markets are
predicting, we can structure notes that
will profit from that view. Differentiation
is the name of the game, even in the
traditional private banking market.
7
“This new generation wants to
make its money grow outside the
financial markets and in ways that
actively help the country develop.
So putting money into the bank
is not good enough; they want to
take risks; they want to start new
companies
How competitive is the private banking
market in Brazil and how does this affect
Banco Itaú?
The market is increasingly competitive.
Obviously we have two large domestic
competitors as well as a number of
boutiques and the large foreign banks
such as HSBC and Santander are also
represented here. Foreign investment
banks like Goldman Sachs are building
up teams and vying for both onshore and
offshore business. And we are even seeing
multi-family offices start to move into the
market. So, yes, there is competition and,
as it has always been, there is an eternal
war between scale and expertise.
That said, competition is our lifeblood.
The merger with Unibanco has given us
both the scale and expertise to compete
with any of these institutions and, looking
forward, Itaú has a unique opportunity
to increase its market share over the
next three years. We are exceptionally
well placed to meet the challenges of the
new marketplace. We have a first-class
team in both the front and back office,
a strong balance sheet, market-leading
infrastructure and an innovative plan for
the future. We are extremely optimistic for
the future.
8
INTERVIEW
João Luiz de Medeiros – The
international perspective
Despite its expanding domestic market, Itaú is keen to be
recognized beyond Brazil, as a fully-fledged international
private bank, competing with the global giants
With such an attractive domestic market,
why has Banco Itaú adopted such an
ambitious international private banking
strategy?
International wealth management is a
high-growth market in which the emerging
markets feature very strongly. Wealth
creation in Latin America, Asia, the Middle
East and eastern Europe continues to
outpace predictions, and servicing the
entrepreneurs and families generating this
is an extremely attractive business.
This is the main reason that private
banking is one of the beachheads of Itaú’s
international expansion. In addition, wealth
management is by definition cross-border.
It allows the bank to capitalize on its
proven strategy of following its customers.
And it requires relatively little risk capital.
When did this strategy begin?
Itaú was an early mover in entering foreign
wealth management markets. For example,
as long ago as 2006 we purchased the
BankBoston’s operastions in Chile and
Uruguay both of which had PB assets. We
have also bought the operations of ABN
Amro, Lloyds and a bank in Argentina. We
have additional penetration in Uruguay
and Paraguay, plus our operations in
Miami and the Caribbean. This gives us
a market-leading presence in the Latin
American ‘Southern Cone’ as well as the
wider region. Itaú has units in the Southern
Cone, the US, the UK, Luxembourg, Japan,
China and the Middle East. We have a large
percentage of clients who are non-Brazilian
as well as managing the offshore assets of
our Brazilian customers. And of course the
merger with Unibanco gave us the scale to
move outside Brazil even more quickly.
And what is the ultimate aim of the
strategy?
We do not want simply to be an
international private bank for our Brazilian
clients and some Hispanic clients on
the side. We want to be a fully-fledged
international private bank, operating with
internationally recognized best practice
and products, offering our services to all
private banking clients. Obviously we are
keen to leverage our Brazilian and other
regional clients, but that is just part of our
objective.
In Latin America, how important is it to
have local operations in the key markets?
When we were less international, we were
driven by business centres like Luxembourg
and Miami, and by our fiduciary centres in
INTERVIEW
the Caribbean. As we have focused more
on markets outside Brazil, it has become
clear that local market knowledge and
management are crucial. You need to know
what is happening on the ground in, say,
Argentina, not simply what your clients
are doing in your bank in Geneva. So local
knowledge is critical.
We have local banking franchises in
Argentina, Chile, Uruguay and Paraguay
which are integrated with our private
banking operations. In countries we do not
have a local presence yet, like Colombia,
Peru, Venezuelaand Mexico, we service
those clients from Miami. This network
gives us a regional viewpoint from the
ground up that other institutions will find
hard to emulate.
As you have accelerated your
international programme, what changes
have you made to your operations?
We have reshaped and restructured
our bank in Miami, which is where the
majority of our regional acquisitions have
been located. We are just about to open
a bank in Switzerland. One aim has been
to develop a common platform across our
operations to give our clients better service
by leveraging central systems. Additionally,
in the Caribbean, where we have units
in the Bahamas and in the Cayman
Islands, we are in the process of creating
independent and exclusively fiduciary units
that focus just on taking assets on behalf
of clients, offering a full array of trust
products, with the banking transactions
that were previously handled there now
executed by dedicated banking centres in,
say, Miami or Luxembourg or Switzerland.
And do you segment customers
internationally in the same way as you do
in Brazil?
Outside Brazil our bankers have a
somewhat greater dispersion of client size,
but the offer follows exactly the same
rules in terms of minimum ticket size, risk
appropriateness and overall service quality.
Have Brazilian clients become more or
less internationally active over the past
three years?
Brazil never fully fitted the old cliché of
other emerging markets in which private
wealth was moved offshore as quickly as
possible. In fact, Brazil has always been
an attractive place to invest and Brazilian
clients have always kept the majority of
their assets onshore. The difference now
is that they compare what is available
domestically with what is available
internationally much more actively and it is
much easier for them to switch from one to
the other. This means that it is important
for the providers of wealth management
services to offer a best-in-class range of
products and services, not simply a service
that satisfies the domestic market.
And can regional banks such as Itaú
compete with the global providers
who have traditionally dominated the
market?
The old model, where the foreign banks
were good abroad but not locally and the
domestic banks were good locally but not
abroad, is broken, and Itaú broke it first.
We have a fully-fledged global offering,
open architecture and we can sell best-ofbreed in our chosen asset classes. We have
impeccable execution and advisory in Latin
American products, together with global
standard products offerings in non-Latin
American products.
9
10
INTERVIEW
that and we have adapted quickly to their
requirements.
How has the increased scrutiny of
regulators affected you and your clients?
João Luiz de Medeiros, director of Itaú Private
Bank International
Take one example.We have redesigned
our investment group to be truly crossborder. So we produce global investment
intelligence not only in São Paulo, but also
in Lisbon, Buenos Aires, Santiago and so
on. It is not Brazil-centric. And we’re not
copying global asset allocations. This is how
we add value. We add our own global view
as an overlay to the Latin American core.
Not many people are doing that because
not many people can.
Have your clients changed anything else
about what they require from a private
bank going forward?
Our clients value advice more than ever
and with interest rates low relative to
traditional levels they are looking outside
fixed-income products and outside
domestic markets. They are increasingly
interested in international opportunities
in private equity, real estate and other
risk assets. They want us to develop more
managed products and to offer more
third-party products. They see the value in
The regulators have always been concerned
about even-handedness, transparency and
suitability and that has been a global trend.
Our domestic regulator had already set the
bar high so the international framework
is not a problem for us. This is a highly
regulated industry, and it should be. Clients
are learning to exercise their rights and
lessons have been learned both by clients
and by the providers in terms of what each
should know about the products they were
buying or selling. In general I think that the
increased regulatory focus will result in a
better service for clients and will play into
the hands of banks like Itaú that already
have the systems and internal controls in
place to ensure that clients have access to
the products and services that are right for
them.
Ultimate objective?
When our clients think ‘Brazil’, we want
them to think Itaú. When they thing
‘Latin America’, we want them to think
‘Itaú’. Regardless of whether they are a
US private client, a UK fund manager or
a Brazilian entrepreneur, we want to be
associated with excellence in this region
and in this business, always with a truly
global outlook.
And more than that, we are looking for
long-term relationships with our clients,
not a short-term relationship based on the
sale of one or two products. We want to be
there for our clients across wealth cycles
and family cycles. This is how we will build
a sustainable international business.
LATIN AMERICA
11
Speaking their language
Itaú believes it has something special to offer its customers
in the Spanish-speaking countries of Latin American: an
understanding of the local environment and a commitment
to the market that the big international players do not
share. By Jason Mitchell
I
taú Private Bank International plans
to be one of the top three private
banks in Latin America within the
next few years and already has $13
billion in assets under management.
Part of Itaú Bank, Brazil’s largest retail
bank and one of the 10 biggest banks
in the world, the private bank has an
ambitious strategy to expand throughout
Latin America. The compound annual
growth rate of its assets has been 15% for
the past three years.
Already, its bank in Miami has around
3,000 private clients and its bank in
Luxembourg a further 3,000. Some 40%
of its clients are non-Brazilian and come
from other countries in Latin America
(known as Hispanic clients).
João Medeiros, head of international
banking at Itaú Private Bank, says: “Itaú
Private Bank International is unique. It
is the only non-European, non-American
bank with important regional operations.
There is no other bank that originates
from Latin America and has operations
throughout the region.”
The bank’s strategy is three-pronged:
first, to keep its dominant position as the
biggest private bank in its home market
of Brazil; second, to make a big push in
the Mercosur countries where Itaú already
has a franchise; and, third, to increase its
market coverage out of Miami for other
Latin American countries where the retail
bank has no local presence.
Kick-starting expansion
The private bank has seen significant
organic growth during the past few years
but its expansion into Latin America
was kick-started by two important
purchases. In November 2006, Itaú
acquired BankBoston International in
“Itaú Private Bank International is
unique. It is the only non-European,
non-American bank with important
regional operations. There is no
other bank that originates from
Latin America and has operations
throughout the region
12
LATIN AMERICA
Miami and BankBoston Trust Company in
Nassau, Bahamas, from Bank of America.
Itaú also acquired BankBoston’s entire
operations in Chile and Uruguay, including
corporate banking, retail banking and
credit cards.
Then, in April 2007, the bank bought the
Latin American private banking business
of ABN Amro. The business operated out
of Miami and Montevideo in Uruguay.
Outside Brazil, the bank’s main markets
are Argentina, Chile, Uruguay and
Paraguay. It has fully-fledged local banks
in each of those countries. However, it
also has a large number of private clients
in Mexico and the Andean countries,
including Colombia, Peru and Ecuador.
Flavio Souza, president and CEO of Banco
Itaú Europa International in Miami and
head of Hispanic markets, says: “The
Mercosur countries represent to us a
natural and great opportunity; Itaú is
a leading bank in affluent segments
in Chile, Uruguay and Paraguay. The
commercial trade flow between Brazil
and the other Mercosur countries is
also a very important aspect. Many
entrepreneurs in the region have used
Itaú’s private bank as a gateway to Brazil.
“The Chilean market, as an example,
offers tremendous opportunities to us.
Itaú has more than 100,000 clients in
the ABC1 segment that can be the source
for a leading local private bank business
in that market. We have developed
a strategic plan to enhance our local
platform and offer a complete spectrum
of wealth management services,
including global portfolio management,
advisory, credit and wealth planning. This
is a strategic project for us because it can
be used as a reference for future projects
in other markets.”
Medeiros adds: “The Chilean investor
is a bit more sophisticated than his or
her counterpart in other countries in the
region. Chileans have a long tradition of
investing abroad because of the relatively
small local economy. They like to invest
in real assets, such as private equity.
They have a more open environment for
investing overseas.”
Flavio Souza, president and CEO of Banco Itaú
Europa International in Miami and head of
Hispanic market
He adds that Argentina represents a very
important offshore market for Itaú. It has
the biggest offshore market after Brazil
and Mexico and it is understood that
LATIN AMERICA
Argentines hold more than $100 billion of
their wealth offshore.
Despite the limited size of their
economies, Paraguay and Uruguay are
also relevant to Itaú’s plans to become
one of the leading banks in Latin
America. The bank has a significant
presence in the banking systems of both
countries, with a market share of more
than 25% of the affluent segments of
both countries. Today, Itaú is one of the
top three banks in Paraguay in most
market segments. This originates from
Unibanco’s acquisition of Interbanco, one
of Paraguay’s most important banks, in
1996 and Itaú’s merger with Unibanco in
November 2008.
Paraguay is a growing market for the
private bank and the country’s economic
circumstances have improved during
the past few years. “The country has
benefited considerably from the rising
price of commodities, especially soya and
sugar,” says Rafael Rosenthal, sales team
head of Hispanic markets in Miami. “That
has created a big opportunity for our
private bank, which has had a presence
in the country for some time through the
former Interbanco franchise.”
Miami: natural hub for Latin America
Since the acquisition of the BankBoston
and ABN operations in Miami in 2006,
Itaú has invested to position Miami as
the main hub for its expansion in Latin
America. The bank has attracted many
experienced talents from traditional
players in the wealth management
industry that have faced difficult times
in the past few years. Based on recent
performance this decision has proven to
be correct. In 2009 the Miami operation
experienced a 21% growth in assets under
management. And in the first four months
of this year the operation has grown 38%.
Souza adds: “We had inflows of $1.5 billion
of net new assets this year. Some of these
assets were invested with us because
of Itaú’s solid financial position and our
ability to structure tailored solutions, like
escrow accounts”.
13
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LATIN AMERICA
Itaú Private Bank has fully adopted the
concept of open architecture. The trading
and execution desk is connected to more
than 50 counterparties. Souza adds:
“We’ve built one of the most competitive
platforms in the industry. We do not
have any bias to execute our transactions
within Itaú affiliates. Many traditional
players in the industry have to execute
their clients’ orders through their own
investment bank trading desks, which
means one additional layer in the process.”
sophisticated advisory and, where
appropriate, we are able to connect them
with our Brazilian clients, as well.
As part of its efforts to support the
expansion of international operations,
Itaú last year became one of the main
sponsors of the Sony Ericsson Open in
Miami. This initiative had a huge impact
on the recognition of the Itaú Private Bank
International brand throughout the region.
Rosenthal adds: “Itaú is keen on Mexico
because it is the biggest Spanish-speaking
market in Latin America. We are making a
big effort to expand our presence in that
market and the bank has made public
its intention of establishing an office in
that country. The value of the Hispanic
business we manage has grown in doubledigit terms during the past two years.”
Miami also concentrates the team that
covers Andean markets and Mexico. The
proximity of these markets to Miami is
one very important aspect. Many wealthy
families have their second home or have
business connections in Florida. Wealthy
families from markets such as Venezuela,
Colombia and Ecuador are constantly
travelling to Miami.
Mexico, the second largest economy
in Latin America, represents the most
challenging but also the main opportunity
for Itaú’s expansion strategy in the region.
“Mexicans are very interested in investing
in Brazil,” adds Souza. “They see Itaú as
the natural gateway into the Brazilian
market. They are demanding detailed,
“The Mexican clients already have ADRs
[American depositary receipts] and
government debt but are looking for
more exclusive investments. In particular,
Mexican and Chilean clients are interested
in alternative-type opportunities in Brazil,
including in local hedge funds and local
private equity investments.”
He says that the growth of Itaú in the
region is more down to the perceived
merits of the bank, especially its solid
financial condition, than any other factor.
The problems that other international
wealth managers have had during the
sub-prime crisis have helped the bank to
consolidate its presence in Latin America
but that has not been the key ingredient
of its growth.
“Our client portfolios have performed very
well from the investments in Brazilian
debt and securities during the past two
years. That has helped to reinforce our
reputation as a leading institution. Brazil
LATIN AMERICA
and Itaú have benefited greatly from a
flight to quality.”
in the rest of Latin America.”
Window of opportunity
Another area where Itaú has been
dedicating a lot of attention is to its
wealth planning unit. The fiscal and
regulatory environments are constantly
changing and wealthy families expect that
their private banks will not only keep them
updated but also will help them to identify
solutions to protect their assets. Souza
says: “We live in a world of increasing
transparency and this trend is irreversible.
Clients are seeking efficient tax structures
fully compliant to the tax and succession
laws”.
He adds that the bank has a significant
‘window of opportunity’ to attract
private clients from other Latin American
countries. Many well-known international
wealth managers have had their
reputations tarnished during the financial
crisis but Itaú’s prestige has remained
intact, because of its solid financial
position.
“Brazil and Itaú have benefited
greatly from a flight to quality
Itaú Private Bank International has
fiduciary units in the Caribbean and has
plans to implement a trust unit in New
Zealand.
Medeiros adds that the bank produces its
own global intelligence, which it is able to
share with its private clients.
“Brazil has become a ‘normal’ country
during the past decade,” says Medeiros.
“It has been very successfully managed
economically during that period. The fiscal
situation is under control and the Central
Bank has enjoyed over a decade of full
operational if not legal autonomy.
“The economy is expected to grow
by more than 6% this year. Brazil has
witnessed a new positioning in the global
economy and that helps Itaú to receive a
fair consideration from prospective clients
“Latin America is in much better shape
today than it was 10 years ago,” says
Medeiros. “Most countries have seen
good economic management, some more
than others. There has been a great deal
of wealth creation in Brazil, because of
the high demand for raw materials and
commodities, on top of a vibrant internal
consumer market. Other countries in the
region have had a similar experience. I
think the cycle of ‘boom-bust’ has been
broken. Most countries are much more
stable today and I think we will start to
see the rates of investment rise sharply.”
Souza adds: “The big emerging economies
15
16
LATIN AMERICA
are attracting considerable inflows. In
many ways, they are now more stable
than the traditional developed markets.
The wealthiest families are now more
inserted into the global economy and
their exposure to Asia has increased
markedly. They like the fact that Brazil has
We are the only player throughout
Latin America whose DNA is
linked to the region. That is very
important for wealthy families, as
they want to protect their wealth
in the long term”
a high level of trade with that region. The
country has enjoyed very strong economic
momentum during the past few years and
they want to be part of that.”
He adds that wealthy families prefer to
stick to one financial institution and that
they do not like to have to change banks
or bankers if a wealth manager decides to
leave the region. This is an advantage for
Itaú because they know that the bank is
very solid and dedicated to Latin America.
Feeling comfortable
“Despite being a new player in this
industry clients feel very comfortable
with us,” says Souza. “Our bank is one
of the top 10 largest in the world, with a
solid financial situation and consistent
track record. Today, we are the only
player throughout Latin America whose
DNA is linked to the region. That is very
important for wealthy families, as they
want to protect their wealth in the long
term, especially when they are planning to
safeguard it for future generations. They
have a clear perception that our bank will
be around for a long time to come. Based
on many concrete experiences they do
not think the same about all international
players in the market.”
Itaú Private Bank International attaches
considerable important to the ‘know your
client’ process before it accepts a new
client. The bank has a thorough set of
procedures in place to ensure that this
happens. “The level of scrutiny is getting
higher and higher around the world,” adds
Souza. “It is part of our culture to be very
strict on the clear identification of our
clients and their source of money - not
only to protect our franchise, but also to
identify opportunities to better serve our
clients.”
Itaú Private Bank International has
expanded strongly in the Latin American
wealth market in recent years. This is
partly because of the problems that
other international wealth managers
have experienced during the past couple
of years. However, it is mainly because
of the growing perception of Brazil as
the region’s economic powerhouse, the
strong performance of Itau’s investments
in Brazilian securities and assets, the
bank’s reputation for financial strength
and its long-term commitment to Latin
America. Brazil is perceived as a success
story throughout Latin America and Itaú is
increasingly seen as the natural entrepôt
into that market.
LATIN AMERICA
Southern Cone partner
Itaú´s presence in Argentina, Uruguay and other southern
cone countries and the attractiveness of Brazil positions
the bank to grow as a preferred partner of Latin American
business men
B
anco Itaú’s strong presence in
the southern cone countries
(Argentina, Chile, Uruguay
and Paraguay) is an important
competitive advantage for the bank,
according to Alexandre Pinelli, Uruguay
country head for Itaú Private Bank
International. “Together with our leading
position in Brazil, the regional footprint in
the southern cone makes us the preferred
partner for individuals and corporations
with investment and business interests in
the Mercosur,” he says.
In Uruguay, Itaú’s presence originates from
the bank’s 2006 purchase of BankBoston’s
operations in the country, which included
private banking, retail banking, corporate
banking and credit cards. “Itaú is the
absolute market leader in Uruguay in the
ABC1 segment, the wealthier individuals,
and one of the leaders in corporate
banking,” Pinelli says. “Leveraging this
local franchise allows us to provide our
clients with best-in class financial services
and support them on both their personal
and corporate needs.”
In Argentina, where Itaú has operated
since the mid-1990s following the
acquisition of Banco del Buen Ayre,
the economy is showing clear signs of
rebounding although the country suffered
a bit more than other Latin American
countries during the recent international
financial crisis. Pinelli says: “Exports to
Brazil have remained very solid and soya
bean production this year will be very
strong.” He also points out that a higher
level of M&A activity is expected in the
country in the near future. He adds: “In
this environment of a growing economy
and M&A activity, there will be good
opportunities for wealth management
activities as the level of wealth creation
and monetization increases.”
The Brazilian effect
Pinelli says the strong performance of the
Brazilian economy over the past five years,
particularly during the global financial
crisis, helps reinforce the attractiveness
of Itaú’s positioning. “The paradigms
of financial strength and security have
changed dramatically with the crisis,” he
says. “Today many emerging economies
such as Brazil are perceived as more stable
and secure than those of the developed
world, as emerging economies present
more healthy financial conditions and
a better outlook. This situation has a
17
18
LATIN AMERICA
People in this business value
stability and long-term
commitment and Itaú is the only
player with a real Latin American
DNA”
positive direct impact on companies and
financial institutions that come from
these emerging countries.”
The outlook for the Brazilian economy
also helps. “Brazil is booming,” Pinelli
says. “Our forecast is 7.5% GDP growth
for 2010. Brazil will probably be one of the
fastest-growing economies in the current
decade and many business opportunities
are out there. Itaú is positioned to provide
Latin American wealthy individuals and
businessmen with full support when
investing in Brazil.”
War for talent: the home bias
Wealth management is a people-based
business, with clients putting great value
on establishing long-term relationships
with financial institutions and its
relationship managers. So private banks
strive to attract and retain the most
talented people in the market. In the recent
past, Pinelli sees a “home bias” movement,
consisting of professionals who have gone
to live and work in global financial centres
such as New York, Miami or Zurich willing to
return to the region. “There is an increasing
interest of Argentines, Uruguayans
and Chileans to migrate back to South
America,” he says. “These people are
attracted by the better relative standards
of living in South America and the growth
opportunities its economies present.”
Pinelli thinks this trend can be leveraged
by Itaú Private Bank and particularly by
its regional office in Uruguay. “As we are
a leading regional player in the wealth
management segment, totally committed
to the region, we think we will be able
to attract part of this talent base for our
private bank business,” he says. “People
in this business value stability and longterm commitment and Itaú is the only
player with a real Latin American DNA.
Montevideo, with its high quality of living
and proximity to other southern cone
capitals, is definitely one top destiny for
professionals and their families to work
and live.”
18
LATIN AMERICA
People in this business value
stability and long-term
commitment and Itaú is the only
player with a real Latin American
DNA”
positive direct impact on companies and
financial institutions that come from
these emerging countries.”
The outlook for the Brazilian economy
also helps. “Brazil is booming,” Pinelli
says. “Our forecast is 7.5% GDP growth
for 2010. Brazil will probably be one of the
fastest-growing economies in the current
decade and many business opportunities
are out there. Itaú is positioned to provide
Latin American wealthy individuals and
businessmen with full support when
investing in Brazil.”
War for talent: the home bias
Wealth management is a people-based
business, with clients putting great value
on establishing long-term relationships
with financial institutions and its
relationship managers. So private banks
strive to attract and retain the most
talented people in the market. In the recent
past, Pinelli sees a “home bias” movement,
consisting of professionals who have gone
to live and work in global financial centres
such as New York, Miami or Zurich willing to
return to the region. “There is an increasing
interest of Argentines, Uruguayans
and Chileans to migrate back to South
America,” he says. “These people are
attracted by the better relative standards
of living in South America and the growth
opportunities its economies present.”
Pinelli thinks this trend can be leveraged
by Itaú Private Bank and particularly by
its regional office in Uruguay. “As we are
a leading regional player in the wealth
management segment, totally committed
to the region, we think we will be able
to attract part of this talent base for our
private bank business,” he says. “People
in this business value stability and longterm commitment and Itaú is the only
player with a real Latin American DNA.
Montevideo, with its high quality of living
and proximity to other southern cone
capitals, is definitely one top destiny for
professionals and their families to work
and live.”
EUROPE
The European connection
Building on its success with a Luxembourg-based bank, Itaú
will soon open in Switzerland, targeting Latin American
clients with European interests
B
anco Itaú is reinforcing its
European presence as one of the
pillars of its growth strategy in
international private banking. In
addition to its bank in Luxembourg, it is
in the process of opening a new bank in
Switzerland.
strategy, Itaú’s bank in Luxembourg has
benefited from several international
acquisitions that the bank has made
during the past few years. These include
ABN Amro’s international private banking
operations in Uruguay and MBA, an
Argentine private bank.
Since 1997, Itaú has had a fully-fledged
bank based in Luxembourg. The
Luxembourg bank has a total of almost
3,000 clients and $8.5 billion in assets
under management. Some 70% of the
clients are Brazilian and the rest come
from Uruguay, Chile and Argentina. Assets
under management have increased at a
compound annual growth rate of 32%
since the bank was established.
In 2008, Itaú merged with Unibanco,
which included up to 1,000 accounts
managed from Luxembourg with a
portfolio of around $1.5 billion in assets
under management.
The bank strives to give Latin American
clients a differentiated level of service. A
good example is its trading hours, which
cover three time zones: Europe, Latin
America and New York. This is unusual
for a European bank and means that
traders are at their desks until 11:00pm,
Luxembourg time, on a daily basis. This
practice will be extended to Switzerland
because clients really appreciate having
their bank a phone call away in the era of
highly globalized markets.
In line with its international expansion
Swiss expansion
Itaú Private Bank International expects
to have a licence for a bank located in
Switzerland by mid-July this year, which
should help it significantly to attract new
clients from Latin America.
Itaú believes it will be important for its
strategy to capture new clients in Latin
America by growing the assets managed
for its existing client base and attracting
new clients from those who have banked
with tradional Swiss banks.
“Most private clients from Latin America
have a good knowledge of the Swiss
jurisdiction and recognize the expertise
of its wealth management industry,” says
19
20
EUROPE
Edinardo Figueiredo, head of Itau Private
Banking European operations.
“We will be the first Latin American bank
with a presence in Switzerland. I think that
will be a significant boost to our effort to
attract new clients from the region.
“We expect that 50% of the new money
We will be the first Latin
American bank with a presence
in Switzerland. I think that will be
a significant boost to our effort
to attract new clients from the
region”
will come from Brazilian clients and 50%
from Hispanic clients. Wealth generation
through M&A activity and IPOs in Brazil
remains very strong and it will remain
an important source of new money.
Additionally, high commodity prices will
keep creating wealth in the rest of Latin
America as well.” Itau thinks it can attract
in excess of $3 billion in new assets for its
Swiss bank alone.
“Whether a client opens an account in
Miami or Luxembourg depends on where
they feel more comfortable,” Figueiredo
adds. “Some prefer Miami, they do
business in the US, so it’s natural for them.
Other Latin American clients do more
business with Europe, so a portfolio based
in Luxembourg or Switzerland makes more
sense to them.”
He believes that most of the Hispanic
clients for the new Swiss bank will come
from countries where Itaú’s has the
strongest local presence: Chile, Argentina,
Uruguay and Paraguay. However, he also
expects to pick up clients from other
Latin American countries who are aware
of Itaú’s reputation for financial stability
and are attracted by the idea of banking in
Switzerland.
The opening of the bank in Switzerland wil
complement Itaú’s strategy to offer full
banking and investment services in the US
and Europe. These booking centres will be
complemented by independent fiduciary
units in three locations – the Bahamas,
Cayman Islands and New Zealand. The
value proposition of Itaú comes from being
able to offer jurisdictions and structures
that suit its Latin American client base,
coupled with its expertise in Brazil and
Latin America, always keeping the global
outlook that today’s financial markets
require.
CONTACT INFORMATION
Contact information
Argentina: Banco Itaú Argentina S.A.
Banco Itaú Argentina S.A. is a full service bank located in Buenos Aires. In addition to
private banking, we also offer all the services traditionally expected from retail banking
institutions.
Address: 19th Floor, Calle Cerrito 740
1309 Buenos Aires, Argentina
Phone: (+54) 11 4378 8400
Fax: (+54) 11 4372 0228
Bahamas: BIE Bank & Trust Bahamas Ltd
BIE Bank & Trust Bahamas Ltd. is organized under the laws of the Bahamas. The
Bahamas is a major offshore banking center and one of the world’s leading tax haven
jurisdictions. BIE Bank & Trust Bahamas’s core business is the management and
administration of trusts and private investment companies.
Address:Charlotte House
Charlotte & Shirley Sts.
P.O. Box: N-3930
Phone:(+1) 242-502-3100
Fax:(+1) 242-328-2750
Brazil: Itaú Private Bank
Itaú Private Bank is the largest Private Bank in Latin America and the absolute leader
in the Brazilian market. Its tradition and experience in asset management, combined
with its diversified portfolio of financial products and services, provide you with unique
solutions to manage your wealth and all-round financial assistance to handle your daily
financial life.
Address: Av. Engenheiro Armando de Arruda Pereira, 707
Torre Eudoro Villela, 14º andar
04309-010 São Paulo – SP - Brazil
Phones:
(+55) 11 5029 1545
(+55) 11 5029 4127
(+55) 11 5029 4122
21
22
CONTACT INFORMATION
Cayman: Unicorp Bank & Trust Ltd.
Unicorp Bank & Trust Ltd. is an exempted company incorporated under the laws of
the Cayman Islands, a British Crown colony with a large measure of self-government.
Georgetown, the capital, is situated on Grand Cayman, where Unicorp Bank & Trust Ltd.
is located. The Cayman Islands are among the largest financial centers in the world and
are known for not applying any income, corporation or inheritance taxes.
Address: Whitehall House - 238, North Church Street - 3rd floor
PO Box 1334
KY1 1108 - Georgetown
Grand Cayman - Cayman Islands
Phone: (+1) (345) 949-6800
Fax: (+1) (345) 949-3722/949-6801
Chile: Banco Itaú Chile
Banco Itaú Chile is a full service bank located in Santiago, Chile. In addition to private
banking, we offer all the services traditionally expected from retail banking institutions.
Address:Enrique Foster Sur 20
Las Condes,
Santiago, Chile
Phone: (+56) 2 686 0000
Luxembourg: Banco Itaú Europa Luxembourg (BIEL)
Banco Itaú Europa Luxembourg is located in Luxembourg. The country has the greatest
concentration of banks in the European Union Luxembourg has a highly organized
financial sector. Banco Itaú Europa Luxembourg provides Latin American clients with
an international investment and wealth management platform. The bank is dedicated
exclusively to private bank business. We offer a range of innovative investment products
and services, as well as exclusive funds and trust services.
Address: 29, avenue de la Porte Neuve
L-2227, Luxembourg
Phone: (+352) 22 33 77 1
Fax: (+352) 22 33 77 210
CONTACT INFORMATION
Miami: Banco Itaú Europa International Itaú Europa Securities
Located in Miami, this unit provides wealth management services to high net worth
Latin American clients. It provides a complete range of first-class banking products,
trading, and tailored financial solutions. All services and products are offering with
convenience, confidentiality and the variety of alternatives offered by the US financial
market.
Address: 200 South Biscayne Boulevard
Suite 2200
Miami, Florida 33131
USA
Tel: (+1) 305 579-9766
Paraguay: Itaú Private Bank International
Itaú Private Bank International has a representative office in Asuncion, Paraguay.
Address: Mcal. López 3.794 and Cruz del Chaco
3rd floor, Assucion, Paraguay
Phone: (+ 595) 21 612230 / 612232
Fax: (+595) 21 612231
Switzerland: Banco Itaú (Suisse) S.A.
Banco Itaú (Suisse) S.A. (currently in the final stages of license application) will offer
a full range of private banking services in Switzerland. The bank – a subsidiary of
the investment grade rated Banco Itaú Europa headquartered in Lisbon, Portugal
– will offer the excellence of Swiss private banking combined with an in-depth
understanding of the needs of Latin American clients. Our team in Switzerland is
made up of experienced and highly qualified professionals. Advisory and discretionary
services, core to the bank’s offering, will include custody, banking, credit, trading,
wealth planning and asset allocation advice.
Address: 3rd Floor, Genferstrasse 2
CH-8002 Zürich
Switzerland
Phone: (+41) 44 575 5000
Fax: (+41)44 575 5040
Email: [email protected]
Uruguay
Address: Luis Alberto de Herrera, 1248
Torre I – Unidad 101 - 11300
Montevideo, Uruguay
23

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