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Barclays, Standard Chartered plan to up local exposure

Bnamericas Published: Wednesday, March 19, 2003
UK-based banks Barclays and Standard Chartered are both planning to boost their investments in Brazil, bucking the overall trend of international banks reducing their exposure to Latin America, Brazilian broadsheet Valor Economico said. By June, Barclays will put US$400mn into the treasury of Barclays do Brasil to meet the local corporate clientele's demand for hedging derivatives, the daily said. Standard Chartered will increase its exposure to the country by 50% through its local office in Sao Paulo. The bank aims to continue serving international clients operating in the country, as well as large local concerns such as state oil company Petrobras, paper and pulp company Aracruz, and mining giant CVRD, all of which are listed on the NYSE. Both banks downsized their operations in Brazil last year amid presidential election uncertainties. Barclays cut its staff by 15% to 54 employees, while Standard closed its Rio office and slashed its local team to 16 people. "We even considered further cuts in business here, but in the beginning of this year we decided to remain in Brazil to better serve regional clients," country manager Cassio Gurjao was quoted as saying. After downsizing in Latin America, the bank's shares stopped falling, Gurjao added. "Now we can gradually resume business with a more selective approach." This year alone Spain's BBVA sold its local franchise to local bank Bradesco, while JP Morgan, Bank of America and Italy's BNL sold their local asset management divisions and German bank Dresdner closed its Rio office. The asset management operations were bought by Bradesco, HSBC and Banco Votorantim, respectively.

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