JPMorgan debuts in retail banking in Brazil with 40% stake in C6 Bank


The JPMorgan logo is seen in Los Angeles, California, United States on October 12, 2010. REUTERS / Lucy Nicholson

June 28 (Reuters) – JPMorgan Chase & Co (JPM.N) has taken a 40% stake in Brazilian digital bank C6 Bank, the companies said on Monday, making its retail debut in the world’s largest economy. ‘Latin America.

JPMorgan announced in January its intention to expand into retail banking through digital channels, starting with Britain. The American bank has focused its activity in Brazil on corporate credit and investment banking.

“We are delighted to partner with C6 and support their growth in Brazil, which has become one of the fastest growing digital banking markets in the world,” said Jamie Dimon, President and CEO of JPMorgan Chase, in a press release.

Founded in 2019 by former partners of Banco BTG Pactual SA, Latin America’s largest independent investment bank, C6 has 7 million clients, according to a statement.

The companies did not disclose the value of the deal or the implied valuation of C6. The digital bank was valued at 11.3 billion reais ($ 2.28 billion) in December, when it raised 1.3 billion reais.

JPMorgan’s entry into Brazilian retail banking follows high-profile departures from other global banks.

HSBC Holdings PLC (HSBA.L) and Citigroup (CN) sold their retail operations in the country in 2015 and 2016, respectively, after struggling to compete with mammoths such as Banco Bradesco SA (BBDC4.SA) and Itau Unibanco Holding SA (ITUB4 .SA).

Online banking has since allowed financial institutions to grow without expensive branch networks, attracting new players to Brazil such as SoftBank Group Corp (9984.T), which recently invested in fintech Banco Inter SA (BIDI3.SA ).

Earlier this month, Warren Buffett’s Berkshire Hathaway Inc (BRKa.N) invested $ 500 million in Brazilian digital bank Nubank for a valuation of $ 30 billion. Read more

JPMorgan and C6 both highlighted Brazilian regulatory reforms, which have fostered competition and enabled digital banks to gain market share.

Daniel Darahem, country director in Brazil for JPMorgan, said the bank will appoint an undisclosed number of directors to the C6 board.

“Partnering with JPMorgan Chase, a global leader in financial services and a trusted name in retail banking, is a game-changer,” said Marcelo Kalim, CEO and co-founder of C6.

C6 recorded a net loss of R $ 607 million in 2020, ending the year with R $ 8 billion in assets. Kalim said the bank is expected to post a loss again this year, given the focus on growth, but is expected to reach 10 million customers by the end of the year.

The bank will use the proceeds to launch two new lines of credit: auto loans and home equity. The transaction also involved the sale of a stake held by minority shareholders.

($ 1 = 4.9532 reais)

Report by Niket Nishant in Bangalore; Editing by Sriraj Kalluvila

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