Scotiabank plans to expand in Brazil, boost team in 'ramp-up moment'

financialpost.com:

Bank of Nova Scotia plans to underwrite local bonds in Brazil and offer cash-management services there as it expands in Latin America’s biggest nation.

“We are in a new moment, a ramp-up moment,” said Paulo Bernardo, Brazil chief executive and country head for the bank, in an interview.

Brazil’s local bond market is booming amid still-elevated interest rates. Total issuance reached 80.5 billion reais (US$16 billion) year-to-date — a 69 per cent increase over the same period last year, according to data compiled by Bloomberg.

Banco Itau BBA and Banco BTG Pactual are the top two underwriters, the data show. Scotiabank plans to enter the market underwriting traditional bonds known as “debentures” in Brazil.

Scotiabank is hiring three executives in Brazil — a senior investment banker, a head for equity sales business and an equity research analyst — to join a team of about 105 employees. It plans to continue hiring in the country, and to increase its offerings of products and platforms in Canada and the United States to Brazilian clients. It also has a goal to boost investments from North America to Brazil.

As of now, the bank has 3.2 billion reais (US$640 million) of capital in Brazil and still has space to grow while meeting capital requirements.

With a lending book of about US$13 billion of assets with Brazilian risk — booked in the nation or abroad — the lender has about 175 clients in the nation, mostly corporations. Its goal is to expand this number, and to reach more institutional clients, including hedge funds.

While the bank’s Brazil business focuses on corporate and investment banking, it has had more of a retail presence in other parts of South America.

Despite the growth plans in Brazil, the bank said last year