R$1billion bank is born by BMG partnering with Itau bank.



Over a period of one week, BMG dropped hints that it would be sold to BTG or Bradesco, and then the company closed a partnership deal with Itau Bank. Under the new deal, BMG will gain leadership in payroll loans as it will get a monthly input of R$ 300 million over the next three years. The joint venture opens a new segment for BMG by raising funds that the company can lend to private company employees.


The following is the part of the interview with Marcio Alaor in with the Estado de Minas publication.


After negotiating with other banks. Why did you choose Itau?


Until last week, the negotiations with Bradesco and BTG involved the total purchase and control. But last Saturday we received a phone call from Roberto Setubal (Itau CEO) who offered a better option for BMG. The new partnership gives more funding for BMG, by injecting a monthly input of R$ 300 million for 90 days according to the agreement. From the beginning to the end, the partnership will inject $3.5 billion over five years.


Apart from the payroll loan portfolio, what else changes in the joint venture?


BMG now has a portfolio of R$ 29billion. According to the joint venture agreement, BMG has to raise the payroll from R$600million to the US $ 1billion in the new Itau BMG bank. That’s our goal in the new bank. We want to make $1billion per month in the new bank, and we have the capacity to do this through our network of approximately 700 agents.


But will it not create internal competition?


No, because it is defined very clearly. The current portfolio at BMG has customers who are always refinancing. A customer takes a loan of R$1000, and after repaying 30% of the loan, he comes back wanting more money. Everything is refinanced at BMG and at Itau BMG we have new contracts.


Marcio ALaor is the Vice-President at BMG, he works under the Ricardo Guimares. Marcio has previously worked in the meat industry, making good returns for his investors. In the current job at BMG, he is responsible for payroll loan distribution and special operations.


Article link http://www.em.com.br/app/noticia/economia/2012/07/14/internas_economia,306005/parceria-bmg-e-itau-nasce-um-banco-de-r-1-bilhao.shtml



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