Interview: BNP Paribas grows in Brazil fiduciary services as rivals exit

Banco Bradesco

10/06/2016 21:51

By Aluísio Alves 
    SAO PAULO, June 10 (Reuters) - BNP Paribas SA  BNPP.PA. , 
the world's fourth-largest securities custodian, expects to grow 
fiduciary services in Brazil by replacing foreign rivals exiting 
Latin America's largest economy, two senior executives said. 
    BNP Paribas' efforts to expand custody and trustee services 
in Brazil include offering these services to current clients who 
hired rivals to oversee the registration and management of their 
holdings, Andrea Cattaneo, the bank's head of securities 
services in Brazil, said in an interview on Thursday. 
    Expectations that foreign portfolio investment in Brazil 
could rise as political and economic turmoil ease are also 
offering opportunities for the French bank to grab additional 
market share, he said. 
    The departure of global rivals, including HSBC Holdings Plc 
 HSBA.L  and possibly Citigroup Inc  C.N , could also help BNP 
Paribas attract more clients in Brazil, Cattaneo added. 
    HSBC's local unit was acquired by Brazil's second largest 
private lender Banco Bradesco SA  BBDC4.SA , while Citigroup 
announced in February plans to exit retail banking in Brazil. 
 urn:newsml:reuters.com:*:nL3N15Y415 
    BNP Paribas aims to double revenue from custody services in 
Brazil by the end of the decade, according to both Cattaneo and 
Antônio Nascimento, head of the bank's sales and relationships 
in Brazil, in the joint interview. 
    The strategy is helping BNP Paribas make strides after Royal 
Bank of Canada  RY.TO  chose it over Bradesco as custodian bank. 
Other recently acquired clients in Brazil include Japan's Mizuho 
Financial Group Inc  8411.T , ABN Amro Group NV  ABNd.AS  and 
Industrial and Commercial Bank of China. 
    The strategy in the custody business is paying off. BNP 
Paribas has quintupled assets under custody in Brazil to 46 
billion reais ($13.4 billion) since 2010, the executives said. 
     
    PROFIT ENGINE 
    Bank executives expect fiduciary services, including trust, 
depositary and custody services, to become a key profit engine 
in Brazil in coming years. 
    Loan books are growing at the slowest pace in 16 years and 
tougher capital requirements are forcing banks to look for 
additional sources of profit in areas other than lending and 
securities trading. 
    Brazil's custody market, worth an estimated 4.83 trillion 
reais ($1.41 trillion) as of April, is highly concentrated, 
according to data from Anbima, the group representing money 
managers in the country. 
    Some three-quarters of the assets under custody are in the 
hands of Itaú Unibanco Holding SA  ITUB4.SA , Bradesco, Banco do 
Brasil SA  BBAS3.SA  and Citigroup. 
    Beyond clearing and settling payments for clients and 
investment funds, fiduciary management allows custodians to sell 
financial service solutions for clients. 
    Globally, BNP Paribas has $10 trillion under custody.  
    ($1 = 3.4276 Brazilian reais) 
 
 (Reporting by Aluísio Alves; Writing by Ana Mano and Guillermo 
Parra-Bernal; Editing by Daniel Flynn and Richard Chang) 
 ((guillermo.parra@thomsonreuters.com; Tel: +55-11-5644-7714; 
Mob: +55-119-8346-7153; Reuters Messaging: 
guillermo.parra.thomsonreuters.com@reuters.net)) 
 
Keywords: BNP PARIBAS BRAZIL/CUSTODY SERVICES