The 1bn-real (US$579mn) credit line Brazil's Banco BMG secured from UBS Pactual will the give the midsize bank time to decide whether to carry out an IPO or form a partnership with another bank, CEO Ricardo Guimarães told BNamericas.
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"An IPO or a partnership are still on the horizon. We could do one or the other but not before next year, if at all," Guimarães said.
BMG spoke with five investment banks before going with UBS Pactual, which proves the confidence foreign investors have in the Brazilian market, he said.
"We're originating a lot of new loans, more than 600mn reais a month. We're confident payroll loans still have a lot of potential, along with vehicle financing."
BMG is a market leader in payroll loans and plans to increase lending at least 25% this year. The bank expanded lending 44.5% last year to 12.5bn reais.
BMG will stay away from international capital markets to fund lending growth for the time being, although chances to sell bonds abroad could arise before the end of the year, Guimarães said.
"We got a good loan at a difficult time," he said of the UBS Pactual deal.
The Brazilian bank embarked on a joint venture last year to offer payroll loans in conjunction with an unnamed private sector bank in Russia but the project was postponed because of financial uncertainty on international markets.
"We look favorably on the development of payroll loans in other countries, especially emerging markets," Guimarães said. "The joint venture in Russia has stalled but not because of our choice."
BMG receives the first installment of 600mn reais from UBS Pactual this week, with the remaining 400mn reais to come at a later date.
BMG unveiled earlier this week a receivables fund program on the local capital market for 500mn reais and two weeks ago raised US$250mn in a two-year bond issue on the Luxembourg stock exchange.
The bank booked 508mn reais in 2007 net profits, up 92.8% on the year before and had 1.33bn reais in shareholder equity at the end of last year.
