Swiss UBS and Banco do Brasil to Create Investment Banking Venture for South America

RIO DE JANEIRO, BRAZIL – The world largest manager of private wealth, Swiss UBS Group, and the largest bank by assets in Brazil and all of Latin America, state-controlled Banco do Brasil, signed a preliminary agreement on Monday to create a joint venture in investment banking in South America, the Brazilian bank said in a securities filing.

According to the filing, the new joint venture will provide investment banking services in Brazil and a number of other South American countries: Argentina, Chile, Peru, Paraguay, and Uruguay.

Banco do Brasil said in the filing UBS would hold 50.01 percent of the joint venture. Reuters reported the deal talks earlier this month.

UBS is very successful in the management of private wealth, counting approximately half of the world’s billionaires among its clients. The bank’s placement power for share offerings worldwide is therefore unmatched.

Commenting on the proposed venture, the companies said: “Both UBS and Banco do Brasil believe that the formation of a strategic, long-term partnership would create a leading investment bank platform in the region with global coverage by building on the complementary strengths of UBS and Banco do Brasil.

“The partnership is expected to provide its clients with comprehensive solutions and would provide additional benefits for its stakeholders.”

Recently, a handful of Swiss banks have targeted the South America market to position themselves better in South America, which is believe to do be underdeveloped in Private Wealth Management and Investment Banking.

Last year, Julius Baer acquired a 95 percent stake in Brazilian wealth manager Reliance Group.

Earlier this year, Geneva-based Mirabau Group, one of the oldest Swiss private banks founded in 1819, obtained regulatory approval to launch two wealth management units in Montevideo, Uruguay.

(Source: Reuters)