Scotiabank is setting its sights on Brazil, aiming to underwrite local bonds and introduce cash-management services as it seeks to deepen its footprint in Latin America's largest economy.
The Canadian banking giant is entering a period of growth, according to Paulo Bernardo, the CEO for Brazil, signaling a strategic push into the Brazilian market.
Amid high interest rates, Brazil's domestic bond market is experiencing significant growth, with issuances soaring to 80.5 billion reais ($16 billion), marking a 69% increase from the previous year. Currently, Banco Itau BBA and Banco BTG Pactual lead the market, but Scotiabank is preparing to make its mark by underwriting debentures, a popular form of bond in Brazil.
Scotiabank is bolstering its team in Brazil with the addition of three key executives to support its growth strategy. This includes a senior investment banker, an equity sales business leader, and an equity research analyst, expanding the existing team of around 105 employees. The bank's strategy includes not only increasing its workforce but also enhancing its product offerings and platforms for Brazilian clients in Canada and the U.S., aiming to facilitate more North American investment into Brazil.
With 3.2 billion reais ($640 million) in capital within Brazil, Scotiabank is well-positioned for growth while adhering to capital requirements. The bank's lending book in Brazil includes approximately $13 billion in assets tied to Brazilian risk, serving around 175 corporate clients. Scotiabank aims to expand its client base, particularly targeting more institutional clients, such as hedge funds.
Though the bank has historically had a stronger retail presence in other South American countries, its focus in Brazil is on corporate and investment banking. Despite this focus, Scotiabank announced last year a strategic shift towards lower-risk, less volatile markets in North America.
