Brazilian banks keep hiring in muted market
June 14, 2019 |
Rising deal activity in M&A, DCM and private banking leads lenders to build up their teams
Hiring managers in Brazil started 2019 with high hopes, encouraged by the pro-market promises of President Jair Bolsonaro, but now that the first half of the year draws to a close, their expectations have tapered off, LatinFinance has heard.
"People have begun to realize how difficult it is to pass pension reform in a hyper-fragmented Congress," said Claudio Gallina, the head analyst of financial institutions in Latin America and the Caribbean at Fitch Ratings.
Despite the delayed reforms, along with a 0.2% dip in GDP in the first quarter this year, some banks in Brazil have embarked on a hiring spree.
"Santander has been doing a lot of hiring, and HSBC has completely rebuilt its team since its non-compete agreement with Bradesco ended earlier this year," one investment banker said.
The Central Bank released a survey on Monday that predicted 1% economic growth in Brazil this year, but the modest forecasts have not halted the rise in deal activity across various lines of businesses, bankers said.
"The full agenda of privatizations in Brazil has kept the M&A space busy, but also the capital markets because of low interest rates in the local credit markets," a second banker said.
"We're seeing competition on corporate deals from new foreign players," a third banker said. Two foreign banks are adding to their debt capital markets and syndicate teams in Brazil to galvanize the momentum, he added.
The wealth management industry has also seen an increase in hiring, spurred by Bradesco's purchase of the offshore private banking and loan specialist, BAC Florida Bank, last month for $500m.
Bradesco's main competitors at home, Itaú and Banco do Brasil, are also "beefing up" their private banking teams, another banker said.