Banco BTG Pactual’s stake in EFG would fall to 5%, from 29%. ΩΡΕ ΠΙΠΗ…

by on 31 May 2019

Banco BTG Pactual SA , Brazil’s largest independent investment bank, on Tuesday said it was launching a full-service digital retail bank to be led by former Telecom Italia (TIM) Chief Executive Amos Genish.

The move opens a new front in BTG Pactual’s challenge to Brazil’s heavily consolidated banking sector, building on its digital investment platform BTG Pactual Digital, launched in 2016 to boost revenues and diversify risk.

In addition to its investment funds, BTG said its retail bank will now offer checking accounts, insurance and loans to mid-sized companies, according to a securities filing.

Genish built Brazilian telecoms startup GVT into a broadband powerhouse before selling it to Vivendi SA, which flipped it to Telefonica Brasil SA, where he became CEO in 2014.

The former Israeli army captain moved to Vivendi, TIM’s controlling shareholder, in 2017 before taking the reins at the Italian telecom the same year. Genish was ousted from TIM last year amid clashes in the boardroom.

In another move that may boost the new retail bank’s business, Banco BTG Pactual plans to transfer most of its stake in Swiss private bank EFG International AG to controlling shareholder BTG Pactual Holding SA.

Reuters first reported this month that BTG Pactual was looking to shift its stake in EFG off the bank’s balance sheet.

Under the plan laid out in Tuesday’s filing, Banco BTG Pactual’s stake in EFG would fall to 5%, from 29% currently, increasing the bank’s core Tier 1 capital ratio to 13.4% from 10.2%, BTG said, allowing more lending to retail clients.

BTG Pactual Holding SA will also sell roughly 2 billion reais in shares it holds in the bank to increase its free float.

The plans underscore how BTG Pactual has been embarked on new challenges after its founder, Andre Esteves, was cleared of corruption charges. Esteves left the CEO role and spent 23 days in jail in 2015 after being accused of involvement in a bribery scheme, but courts acquitted him last year and he has made a gradual return to operations.

By Carolina Mandl –