Economy

Itaú passes BB and takes leadership of Brazilian credit market

Change is seen as a result of Bolsonaro government's decision to reduce public sector participation in Brazilian credit market

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  • Itaú ended September with a portfolio of BRL 688.9 billion, above the BRL 686.7 billion balance of Banco do Brasil;
  • Since the end of 2016, Itaú was the biggest rival of BB in total assets.

The balance sheet season of the third quarter of this year brought a major change in the Brazilian credit market: for the first time, Itaú Unibanco, one of the largest private banks in the country, passed the state-owned Banco do Brasil in loan portfolio (loans, financing, debt securities and guarantees) and became the largest in the country.

According to the Valor Econômico newspaper, Itaú ended September with a portfolio of BRL 688.9 billion, above the BRL 686.7 billion balance of Banco do Brasil. From September last year, Itaú’s stock of operations grew 8.3%, while BB’s stock fell 0.7%.

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The publication points out that since the end of 2016, Itaú was the biggest rival of BB in total assets (a figura that also takes into account cash and financial investments). “But it had never threatened BB’s leadership in credit, the core activity of a commercial bank.”

For journalist Talita Moreira, who wrote the article for Valor, the change of positions is emblematic of the Bolsonaro government’s decision to reduce public sector participation in the credit market. “The orientation is for state-controlled banks to focus on the lines where they are most competitive, and let the private sector and capital markets do the rest,” she wrote.

On Itaú’s side, the result also shows that the organization has made some sound decisions to broaden the range of financial services and accelerate the bank’s digitization.

Later this week, Itaú announced the acquisition of Zup, startup of the city of Uberlândia, in Minas Gerais state, created in 2011. According to the newspaper O Estado de S.Paulo, the total amount of the transaction is BRL 575 million , and the purchase will be made in three steps over four years.