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June 23, 2020

BTG Pactual to raise $380m to boost digital retail banking

Brazil’s investment banking company BTG Pactual is planning to raise R$2bn ($380m) via share sale to accelerate its digital retail banking operations, Reuters has reported citing a securities filing.

The bank intends to sell 28.5 million new units, which comprises one common share and two preferred shares.

However, due to overallotments, the number of shares may increase to 35.6 million units, the report added.

BTG will use the raised capital to fund the expansion of its recently launched digital consumer banking platform.

It intends to keep the market capitalisation of its retail banking platform high while it expands its business.

In May, BTG Pactual CEO Roberto Sallouti said that the bank intends to complement its retail banking unit as it sees strong business opportunities including the acquisition of smaller rivals.

The units in BTG surged 2.39% after announcing its latest share offering. However, the price per unit is down 2.9% this year.

The bank will set the price per unit on 29 June 2020 and BTG, Bradesco BBI, Itau BBA and Banco Santander will manage the offering.

The move comes after the bank’s NASDAQ-listed rival XP’s shares surged nearly 23% as the retail digital broker rapidly boosted its assets and number of clients.

Reports emerged that the digital broker’s market capitalisation is nearly half of its shareholder Itau Unibanco Holding SA.

According to Reuters, Itau Unibanco is said to be the largest lender in Brazil.

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