Switzerland's largest bank wants to reach the wealthy in rural Brazil, who are reaping gains from the commodities boom.
«Most banks never explore the interior much,» country head at UBS Bank Brazil and head of wealth management for Latin America Sylvia B. Coutinho, told «Bloomberg» in an interview Monday.
UBS is expanding into rural Brazil to find millionaires benefiting from the rapid growth in the country’s agricultural and technology sectors.
The bank is planning a wealth management office in the midwestern city of Goiânia, the capital of the Brazilian state of Goiás, also known as «Brazilian Texas» because of its agricultural similarities. Another branch will open this month in Recife, a city in the northeast of the country that is becoming a technology hub.
Commodity Boom
The agricultural industry has grown significantly in Brazil even though the country’s gross domestic product has shrunk, Coutinho, who holds an MBA in agricultural engineering and a post-graduate degree in agricultural economics, said in the report.
«Most of the sector's entrepreneurs are exporters, hedged in dollars, who are benefiting from an increase in commodities prices,» Coutinho added.
Growth in the Midwest
While funds under management in the overall market grew 5.2 percent to 1.87 trillion reais ($370 billion) from January to September, private banking volumes in the Midwest increased 22 percent to 54.6 billion reais, according to the capital markets association Anbima.
UBS's expansion plan is supported by its joint venture with state-owned Banco do Brasil for investment banking in South America and brokerage business in Brazil. Banco do Brasil is the country's largest lender to agricultural businesses and has close ties to entrepreneurs in the sector, the report wrote.
Approximately 1,300 UBS bankers look after around 50,000 private banking clients in Latin America. In Brazil, UBS's wealth management business currently has offices in Sao Paulo, Rio de Janeiro, and the southern city of Curitiba.
