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Brazil's BB denies being in negotiations to buy stake in Brasil Plural

Bnamericas Published: Wednesday, October 16, 2013

Brazilian federally owned lender Banco do Brasil (BB) has come out to rebut press speculation that is in talks to acquire a 49% stake in local investment bank Brasil Plural.

"Growth in this segment [investment banking] will be done organically," a BB spokesperson told BNamericas in an emailed statement.

Local magazine Veja reported earlier this week that the two companies were in negotiations. Brasil Plural was founded three years ago by former partners of São Paulo-based investment bank​ BTG Pactual.

BB's plans are ambitious: earlier this year, it said it wanted to expand its investment banking unit to become Brazil's largest wholesale and investment bank. But one major barrier to this is staff remuneration. In investment banking, most of the payment is variable and is linked to performance. As a public bank, BB has pay and bonus restrictions​.

BB was in talks with local lender Banco Votorantim (of which it owns 49.9%) to increase its stake in the bank and negotiate a new partnership model for an investment bank, but those negotiations were suspended in August.

According to financial research firm Dealogic, Brazil accounted for nearly 50% of Latin America's investment banking revenues in January-September, with US$613mn.

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