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Brazilian bank Bradesco (NYSE: BBD) expects to more than double sales from its private label and financial services partnerships this year, executive director Paulo Ísola told BNamericas.
Credit card sales through the partnerships will reach 4bn reais (US$2.02bn) this year and the number of cards issued will rise 70% year-on-year to 10mn, he said.
Bradesco has more than 20 private label and financial services partnerships, including with major national retailer Casas Bahia.
Aligning with national and regional retailers helps the bank reach out to lower income earners, fundamental to ensure future growth of the credit card segment in Brazil, Ísola said.
"With private label cards, low-income clients establish good credit histories," he said.
Fernando Castejon, VP of business development for Visa do Brasil, said private label cards raised the credit awareness among low-income consumers. However, banks and retailers are increasingly converting private label cards into branded ones such as Visa.
"The process was quicker than we thought," Ísola said. "Today, close to 30% of our private label cards are branded."
Visa do Brasil expects sales volume with Visa-branded cards to surpass US$60bn this year as total card transactions rise over 20% compared to 2006 to more than 300bn reais, Castejon said.
Bradesco increased credit card operations 67.4% in the first half of the year compared to the same period 2006. The bank expanded its entire retail loan portfolio 21.9% year-on-year to 49.8bn reais at end-June.
Bradesco is Brazil's largest private sector bank with 291bn reais in total assets at end-June this year.