Brazil’s BTG Pactual to Expand Push Into Retail Banking

RIO DE JANEIRO, BRAZIL – Latin America’s largest independent investment bank Banco BTG Pactual SA plans to launch products from credit cards to mortgages, as it intensifies a push into the consumer space, said Rodrigo Cury, BTG’s digital retail unit head.

Cury said in an interview that the bank has started to offer checking accounts to consumers who are not already BTG clients, using its retail brand BTG+. It is also preparing to launch payroll loans, home equity and mortgages by December, Cury said.

“BTG has always planned to become a full retail bank, but brick-and-mortar branches were a deterrent factor in the past,” said Cury. “Now digital banking allows us to do it, and it is interesting for shareholders in terms of diversification and synergies.”

Profitability in retail banking tends to be higher than in the corporate services, while fees for consumers are also more stable than those from trading and investment banking.

Founded in 1983 as a brokerage firm, BTG became known as an investment bank and asset manager. But controlling shareholder André Esteves has gradually nudged it toward consumer banking over the past decade.

The shift began in 2011, when BTG acquired a co-controlling stake in midsized commercial lender Banco Pan SA. Five years later, it launched an online investment platform which has since boosted the bank’s assets under management.

Brazil’s seventh biggest bank by assets, BTG is mainly eyeing clients who already have a checking account elsewhere, which means that it will be taking on Brazil’s biggest lenders: Itau Unibanco Holding SA, Banco Bradesco SA , Banco do Brasil SA and Banco Santander Brasil SA.

BTG will not charge fees for some services such as basic checking accounts and credit cards, like most of its online banking rivals. Still, it has launched premium accounts and cards, which include items such as electronic road toll payments, magazine subscriptions and ten free days of overdraft.

Retail services are likely to increase BTG’s products for companies, including payroll services, Cury added.

Shares in BTG went up more than 25% in the last 12 months on the prospects of its online thrust, while shares in the country’s biggest banks fell during the same period.