Adding another link to its network of brokerage and asset management companies in Latin America, Bankers Trust New York Corp. is setting up an investment banking joint venture with Banco Itau SA in Brazil.
Bankers Trust and Banco Itau are putting $25 million each into the joint company, to be known as Itau Bankers Trust Banco de Investimento SA.
The Sao Paulo-based investment bank will initially engage in trading in local markets, corporate finance, underwriting, and funds management and will also serve as a platform for the two companies to expand investment banking and capital markets activities.
Banco Itau, Brazil's second-largest private bank with about $16 billion in assets and 1,000 branches, is also one of the country's biggest underwriters and fund and portfolio managers.
Eugene B. Shanks Jr., president of Bankers Trust, said in a statement that the two banks are looking to combine Bankers Trust's expertise in structured products, trading and risk management with Banco Itau's large number of clients and ability to originate and distribute transactions in Brazil.
The joint venture is Bankers Trust's second foray into Brazilian investment banking. The bank held a minority stake in a local Brazilian brokerage firm, but sold it to the company's majority partners several years ago.
Tom Parisi, a Bankers Trust spokesman in New York, said that a policy of building up "strong local vehicles" in Latin America rather than any immediate market opportunities was the main reason for the move.
The bank has steadily expanded its network in Latin America over the past few years and recently obtained approval from Mexico to set up an investment banking subsidiary there.
Elsewhere in Latin America, Bankers Trust controls two pension funds, Consorcio Nacional de Seguros SA and Compania de Seguros de Vida SA, and three brokerages: Bankers Trust Coredores de Bolsa Ltd., Inversiones Bankers Trust CA, and Bankers Trust Argentina SA.
