Investment Bank of the Year 2018 -- Brazil: Itaú BBA

Investment Bank of the Year 2018 -- Brazil: Itaú BBA

Itaú BBA is not only Brazil’s largest bank in terms of assets, it is also the country’s farthest reaching financial institution, with a solid presence in the Andean region and the Southern Cone.

The bank placed first in lending and as a lead arranger on project and infrastructure non- or limited-recourse financing in Brazil for 2017, according capital markets association Anbima.

Itaú has also proven itself a force within Brazil’s equity capital markets. This year so far, it has worked on IPOs for Arco Platform, Notre Dame Intermedica and PagSeguro Digital. And in the follow-on space, the investment bank helped Azul sell more shares after the airline’s oversubscribed IPO last year.

“We want to be the investment bank for deals in Brazil and Latin America,” says Roderick Greenlees, global head of investment banking. “When a foreign client wants to do something, we want them to think about Itaú BBA.”

As an example, Greenlees cites the bank’s advisory work on the sale of Saõ Paulo state’s Eletropaulo to Enel. “Eletropaulo had Brazilian shareholders, but also AES investors from the US and the buyer was from Italy,” adds Greenlees. “Cross-border deals are a big part of our business.”

So, too, is project finance. Over the past year, Itaú BBA completed deals for toll road Entrevias, solar power provider Pira Pora and a structured financing for the Santo Vitoria do Palmar wind farm.

“We have been able to position ourselves in different products with clients that have different profiles,” says Greenlees.

Looking ahead, Greenlees is buoyed about Itaú BBA’s opportunities in the M&A advisory business, particularly in the energy, education, healthcare and fintech realms. “M&A deals are not as intimately connected to the short- and medium-term outlook,” he adds. “They are transactions made with a long-term horizon.”

Indeed, Brazil’s short-term remains riddled with uncertainty. Greenlees expects the exchange rate to stabilize after the second round of the presidential election and is hopeful that more fixed-income and M&A activity will round out the year.

“Next year, the scenario will be clearer, when we will know the president’s profile,” he adds. “For investors, the biggest risks have to do with Brazil’s fiscal deficit.”

The country’s deficit is tied to its prospects for economic growth and Greenlees says that fiscal stability in Brazil will only happen “if reform is implemented,” particularly in the country’s pension system. LF