Banco Fibra explores cards as issuer, acquirer, processor - CEO

Tuesday, May 25, 2010

Brazilian midsize bank Banco Fibra will explore its card operations to make the most of the value chain in this market, reviewing its current role as an issuer, as well as opportunities in acquiring and processing, CEO Antônio Francisco de Lima Neto told BNamericas.

"Banco Fibra doesn't have a big card operation and we are just starting to issue some cards in some lines," the CEO said, noting that the bank plans on better penetrating its retail client base of 1mn customers.

The market is concerned about regulatory reform in the card segment, as evidenced by a large drop in the market caps of acquirers Cielo and Redecard last week after what still appears to have been a misinterpretation of the justice minister's comments on reform efforts.

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However, Lima Neto said that Banco Fibra will be betting on long-term economic growth and financial services penetration to win the day and will likely find a partner to start operations in these segments.

"In the end, it will be important not only to be a card issuer, but also to be an acquirer and processor in order to add value in the card chain," the executive said. "I think the movement by Santander Brasil [NYSE: BSBR] [to create a new acquirer] is interesting, but we should also look at the one by Bradesco [NYSE: BBD] and Banco do Brasil (BB) to try to create a new card brand in Brazil - Elo - to displace Visa [NYSE: V] and MasterCard [NYSE: MA]."

The full interview with Lima Neto will be published in this week's Banking Perspectives, for subscribers only.