Category: People

Marcio Cypriano, CEO of Bradesco, tells LatinFinance he sees few opportunities to grow through acquisition, and that his institution is focused on organic growth in the wake of Itau’s planned purchase of Unibanco. “The opportunities to buy [another bank] are very limited. The Brazilian [bank] market is clearly defined,” he says in an exclusive interview Thursday. “There has been a specific, one time event that has shifted the overall ranking [of banks in Brazil,] which is causing some commotion out there,” he says, referring to the deal announced Monday. “For us, it is remains essential to evaluate carefully any potential deal, especially from the point of view of its value to our investors, and only follow through if it really makes sense.” The bank is in no hurry to go out and buy another bank, Cypriano adds. Bradesco executives add that organic expansion is the main route, which could eventually help it catch up to Itau-Unibanco. Bradesco’s already distant hopes of acquiring Nossa Caixa, which belongs to the state of Sao Paulo, appear to have been dashed by two developments this past week. A Tuesday ruling by the National Judicial Council defending state-owned entities exclusive right to manage judicial deposits, of which Nossa Caixa has many, and a local report by the Folha de Sao Paulo Thursday saying Sao Paulo’s governor met with Banco do Brasil officials to sell the bank for BRL6.4bn. Nossa Caixa shares rose 13% Thursday while the Bovespa dropped 3.8%.

Vale CEO Roger Agnelli insists his company plans to deploy the bulk of its $15.3bn cash position internally, rather than on acquisitions. “[There’s] nothing better [to do] right now than to buy back our own shares. We feel current [share] prices are implying a disaster for next year. We don’t see this disaster,” Agnelli says during Vale’s visit to the New York Stock exchange. He notes the company’s $11.5bn follow-on in July was executed at twice today’s levels. The costs of organic investment have dropped along with asset prices, and Vale is committed to finishing all of the projects in its pipeline, he claims. According to its investment plan, the miner is looking at spending $14.2bn on more than 30 projects on five continents. Agnelli did not discount the possibility of studying an acquisition if the right opportunity was there. Also, Angelli says the move to cancel a 12% price increase for Asian customers, was due to a drop in demand. “The problem today is not price, the problem for everyone is demand,” he says.

Santander’s proposed acquisition of ABN AMRO’s Banco Real, initially announced last year, led Unibanco’s CEO Pedro Moreira Salles to sit down with Itau CEO Roberto Setubal to discuss the possibility of a merger. “For the first time we were faced with a foreign competitor that was bigger in scale and capital than Unibanco, and the same size as Itau,” says Salles, referring to Santander in an internal memo obtained by LatinFinance. The memo was sent yesterday to Unibanco employees. The talks began in Salles’ living room in July 2007, says the note, just as a domestic debt crisis in the US began spreading to other parts of the financial system. The CEO’s affirmation counters the notion the deal was hurriedly put together amid a global wave of bailouts, failures and mergers, though analysts tell LatinFinance they believe changing markets accelerated the talks. Unibanco shares fell 46% between October 1 and October 24. “This totally changes the banking landscape in Brazil,” Celina Vansetti, banking analyst at Moody’s, tells LatinFinance. She notes while the system was previously dominated by a five large private and state owned banks, it will now have one single institution that is by almost every metric much larger than its next competitor. Vansetti says she believes the change is positive for both institutions and fortifies Brazil’s banking system as it heads into a more challenging environment. Unibanco preferred shares closed at BRL7.09, up 21.00%, while Itausa preferred shares closed at BRL8.23, up 14.31%.

Vale CEO Roger Agnelli dodged questions about a possible re-attempt at Swiss miner Xstrata during a conference call Friday. “The fact is we’re quiet. We’re just looking after our own house,” he says, as Vale prepares to face poorer economic conditions in 2009. Debt problems at Xstrata parent Glencore and a decline in Xstrata’s market value have led to speculation that it might be an opportune time for the Brazilian miner to try again for the unit. “Even with the current asset prices, it’s more interesting for Vale to continue with its organic growth,” Agnelli says. Vale also said this week it was not attempting a purchase of Xstrata in a statement. The CEO sees a recession of at least 6-7 months, but that Vale is in a strong position due to its strong cash position. It raised $12.6bn in a share sale in August and has about $15.3bn total on hand. The majority of 2009 investment will be maintained, Agnelli says, but 2010 investments could be reduced depending on the extent of poor conditions.

In early September, Buenaventura CEO Roque Benavides said that the company was looking for acquisition opportunities. But as the global economy slides, the Peruvian miner is putting potential deals on hold. However, it is keeping its eyes open for targets to acquire in the future, vice president and CFO Carlos Galvez tells LatinFinance, adding that he expects the crunch to last more than a year. “The most important thing right now is to stay liquid and be careful about spending our cash. Cash gives us the opportunity to make the acquisitions we want, but we aren’t doing anything right now,” he adds. Galvez notes that the company is no longer considering appointing an investment adviser. “We will hire one when the time is right,” he says. Benavides had previously told reporters that the company was in talks with some potential advisers, who were in turn talking to potential targets for Buenaventura. Asked what countries Buenaventura is interested in expanding into, Galvez lists Argentina, Brazil and eventually Mexico. “Our investors have asked us to diversify geographically to reduce risk,” he says. As far as diversifying by product, Galvez says that if Buenaventura acquires outside Peru, it will stick to gold and silver projects. Within Peru, however, the company will consider precious or base metals.

Jose Landa, president and CEO of GMAC Financiera, has resigned. Mauricio Alberto Jannet, director of origination and capital markets and 9-year veteran of the institution, will take his place immediately, the Sofol says. GMAC did not indicate the reason for Landa’s departure. The move follows downgrades for the parent company amid difficulties related to the US subprime crisis. It came close to selling the GMAC Hipotecaria and GMAC Financiera units to Ixe this summer.

LatAm veteran Mohamed El-Erian is taking over the CEO role at Pimco when his co-CEO Bill Thompson retires at the end of this year. El-Erian managed the Harvard endowment before returning to Pimco in January. He will also continue his role as co-CIO with Bill Gross. Pimco controls $840bn in client assets.

Petrobras is studying the possibility of holding a new share sale to raise money needed to develop its newfound oilfields, according to wire reports citing CEO Jose Sergio Gabrielli. Gabrielli added that no sale is yet scheduled, and that the company prefers to issue debt – pointing to a debt-to-revenue ratio of 17% that could be boosted to 25-35%. The state-controlled oil producer has said it plans to raise about $5bn in debt this year, and is expected to come to that market this fall, following an aborted cross-border bond deal after a non-deal road show this spring.

The Standard Chartered Private Bank has appointed Diego Folino regional head of its Americas unit based in Miami. Folino is currently President and CEO of Standard Chartered Bank International, formerly American Express Bank International. He will be responsible for the private bank offices in New York, Miami and LatAm, as well as governance oversight of the Miami office and of the private bank network marketing offices in California and Canada. He reports to Peter Flavel, global head of Standard Chartered Private Bank, as well David Stileman, CEO of Standard Chartered Americas. Folino was previously CEO of Standard Chartered Mexico, where he was largely responsible for broadening corporate and institutional client relationships and building the wholesale franchise. Gil Schmidt, regional head of Standard Chartered Private Bank Americas was meanwhile appointed global head of strategy implementation and new ventures.