Brazil’s largest
private bank Itaú is ramping up its international expansion plans
in the US and Europe in 2011, boosting scale to fulfil its
ambitions of becoming a top-tier international private bank.
Itaú International Private Bank
chief executive João Medeiros said the bank wants to grow its
offshore private banking business by 15% annually over the next
three-five years.
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“The key strategic goal we have
now, which is almost like an obsession, is gaining scale and
becoming one of the big players in international private banking
and for Latin America. We have some catching-up to do because we
have to acquire more scale,” he said.
In 2010 the private bank grew net
new assets by $7.5bn across its domestic and international banking
operations. In December 2009, its assets under management were
$56bn, it closed 2010 with $70bn.
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By GlobalDataThis international emphasis is part
of the bank’s efforts to position itself as an adviser/partner to
entrepreneurial families.
“We are positioning the bank to be
like the markets we come from: dynamic and entrepreneurial. People
are in early stages of wealth creation – we want to rise with
clients. This is part of making our clients more
international.”
Itaú’s rapid international growth
plans rely on expanding its presence in its three core markets:
Brazil, the US and Europe.
Medeiros said his big project for
2011 is to build up its investment capabilities by building a
global advisory platform based in the US.
“The big project is to really beef
up the global strategy group in New York, because we think the
talent is there to bring in this global advisory expertise,” he
said.
“No client will argue our expertise
in advising on Brazilian assets but they might say we need to do
more globally. We understand that we have to do more.”
Plans to bolster advisory
offering
Itaú is starting a concerted hiring
push to boost this investment advisory arm. Its international
private bank has about 30 bankers dedicated to investments and
Medeiros wants this to grow by 25% this year.
It has about 90 bankers in Brazil,
25 internationally and recently hired two senior ex-Citi private
bankers to service both the domestic Brazilian and international
markets.
Switzerland to become ‘hub
of European operations’
Building its offering in Europe is
crucial to its growth objectives and centres on a strong foothold
in Switzerland. Last year Itaú became the first Latin American bank
to set up in Switzerland.
Itaú Suisse received its licence in
late July, got its first account opening kit in September and
officially opened three months ago. It has since hired three
bankers and opened a few dozen accounts with a few hundred million
dollars under management.
“The whole idea is to make
Switzerland the hub of our European operations,” said Medeiros.
“Switzerland is a very important
jurisdiction in Latin America, despite all the challenges it
currently faces. The Swiss have a deep knowledge of wealth
management, they have amazing talent, infrastructure and scale –
Itaú is going there because of those things.”
Unlike many private banks,
expansion into Asia does not feature in Itaú’s growth plans in the
immediate future.
“For us [Asia] would be excessively
ambitious,” Medeiros said.
“We do have Asian ties because our clients do business in Asia,
but I do not think the time has come for Itaú to think about
launching in Asia.”
