|
|
 |
 |
 |
 |
   |
FINANCIER: ROBERTO SETUBAL (int'l edition)Latin American financial markets are crashing--so why is Roberto Setubal on a shopping spree? The CEO of Banco Itau, Brazil's second-largest private retail bank, figures that in the long term, cross-border banking will grow: ''Borders will be less noticeable, and we'll have a strong position.'' Setubal recently bought a bank in Minas Gerais state for $500 million. Last year, he bought Banerj, with 195 branches in Rio de Janeiro, and Argentina's Banco del Buen Ayre. Shaky markets don't faze him. ''The risks are higher, but so are the returns,'' says Setubal, 43. His father, Olavo, is chairman of Itausa, which makes everything from computers to bathroom fixtures--and controls the bank. No Latin American bank has benefited more than Itau from the consolidation wave sweeping the sector. In Brazil, at least 50 banks have shut or merged in the past three years. In the days of triple-digit inflation, before President Fernando Henrique Cardoso's Real Plan in 1994, banks could make easy money from the wild distortions in Brazil's economy by investing, say, in government paper that yielded over 40% a month. Although interest rates remain volatile, inflation is down to 3% a year, so lenders must improve efficiency and customer service to be profitable. To whip Itau into shape, Setubal cut the workforce to 27,000, from a high of 93,000. Profits rose 22% in local-currency terms last year, to $650 million. Now, Setubal claims, Itau, with assets of $45 billion, is sitting on $12 billion in cash and paper. He hopes that that will see it through Brazil's financial crisis--while he loads up his shopping cart.
|
Updated Oct. 15, 1998 by bwwebmaster
Copyright 1998, Bloomberg L.P.
Terms of Use