Brazilian Bank Puts Bigger Accent on U.S.
The largest bank by assets in South America wants to make more of a name for itself in the United States.
Banco do Brasil aims to grow not just by getting more business from the Latino communities it already serves in South Florida, but by first appealing to Brazilians, and then general consumers, across the country. Its initial steps include introducing a new credit card product and an online banking experience that it believes is differentiating.
"We have a very ambitious growth goal for this year and the coming years," said Antonio Cassio Segura, president and chief executive of the U.S. unit, which is named Banco do Brasil Americas, but markets itself as BB Americas.
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His intent is to reach $1 billion of assets by the end of 2018, up from $387.5 million at the end of the first quarter.
BB Americas has been growing steadily since 2013. Its Brazilian parent acquired a small Miami bank called Eurobank and renamed it the year before, and Segura said an internal reorganization, meant to prepare BB Americas for growth, took up much of that first year.
He said there is no acquisition activity afoot, at least in the short term. The focus is on organic growth and that includes opening branches.
BB Americas kept two of Eurobank's three branches and has since opened six more, at least two of those just in recent months. Segura expects to add several more branches over the next three years, not necessarily in South Florida.
An expansion into the northeast is likely, with Connecticut, Massachusetts, New Jersey and New York being especially attractive because they all have large Brazilian populations, he said. But those states are not in any particular order on his wish list.
Expanding westward is out for now. Segura said staying on the East Coast will help contain operational expenses.
BB Americas' initial strategy has been to target international customers. It courts Brazilians along with those from other Latin American countries who live in Florida either part or full time. That's because most are already familiar with the 207-year-old parent company, a $600 billion-asset behemoth that has 5,400 branches across 24 countries.
Segura said many of these customers own second homes or businesses in Florida.
"When the Latin American customer thinks to invest in the U.S., the first thing is South Florida and central Florida," he said. "So we are located in the best place."
Because of its customer base, BB Americas invests heavily in compliance relative to its asset size. More than 10% of its employees focus on Bank Secrecy Act and anti-money-laundering compliance.
Ken Thomas, a Miami-based consultant who follows Banco do Brasil, said it has strong growth prospects, particularly in trade and international finance and in serving foreign nationals.
"As Citibank and other big banks pull out of Brazil and other Latin American counties, this will open up even greater opportunities for Banco do Brasil, not just there, but also here," Thomas said. "I am surprised they have not made a bigger deal in South Florida, which is a big market for them since Miami is the 'capital' of Latin America."
Two key business lines for BB Americas are mortgages and commercial loans, with more than half of its borrowers coming from abroad. "They live in another country, but spend up to three or four months in the U.S.," Segura said.
Besides all the usual deposit products, BB Americas also markets credit cards and auto loans to these customers, with the latter being restricted to Florida for the time being.
But the idea is to cast a wider net. Segura expects the new online banking platform to help BB Americas start attracting more U.S. customers.
Another way it aims to bring in customers is with a new credit card that offers some true Brazilian flair. It struck a deal with the pop artist Romero Britto to create designs for the cards.
To make access less of an issue, BB Americas has a partnership with Allpoint, which operates 55,000 surcharge-free ATMs worldwide. Customers also will be able to make deposits at 12,000 ATMs in the states, as well as through remote deposit capture using their mobile devices.
Marketing will rely heavily on social media.
Though Segura expects the investment BB Americas is making in its digital capabilities to result in one of the most modern banking platforms around, bricks and mortar will continue to be important. "We don't want to be 100% digital," he said. "People want to know where they can find you if they have some questions."