From Economia “Parceria BMG e Itaú: nasce um banco de R$ 1 bilhão”

We want to borrow $ 1 billion per month in the new bank and we know you have this condition. We have a network of approximately 700 correspondents and all remain at BMG and will also be registered in Itaú BMG.

Within a week, the BMG dropped bets that would be sold to BTG or Bradesco and closed a new partnership with Banco Itaú taking advantage of one of its greatest strengths: leadership in providing payroll loans. Executive vice president of BMG, Márcio Alaor de Araujo celebrates the partnership that will result in the creation of a new bank, Itaú BMG Payroll, which will operate exclusively in the discount lending in payroll and allow the BMG keep operating as It is today. With the merger, the mining bank will have a monthly line of R $ 300 million of Itaú to operate for three years. In 90 days, when the new bank start operating, others monthly R $ 300 million will be made ​​available to the joint venture and in this case will be for five years. “It’s a new segment that opens to BMG in this joint venture. The bank now also finance employees of private companies and that there is a huge market,” said Márcio Alaor in an interview with Estado de Minas.

-BMG was negotiating with other banks. Why the option of joining the Itaú?
“Until last week negotiations with Bradesco and BTG involved the total purchase, control. But last Saturday we received a call from Roberto Setubal (Itaú Unibanco CEO) with another option for BMG, which does not change anything in the current database and gives us a good perspective for the future. Itaú also gave us an interesting option because from the partnership it will give money, funding for BMG, which is replaced by a monthly credit line of R $ 300 million by the constitution of the joint venture – which will take around 90 days. From the moment that the joint venture to start operating, it will give us funding to $ 3.5 billion over five years, ie, R $ 300 million per month.”

-The difference is that now will be contributed in BMG and in the near future in the joint venture?
“No, better than that. Actually I’m going to have funding both BMG, which is that monthly line of R $ 300 million for three years as the joint venture. And the BMG continues to operate normally with 30% of payroll loans and receivables portfolio. So that’s the current BMG and that will continue.”

-Including the operations that were acquired recently as Banco Schahin?
“Everything is in the BMG and not change anything. Now, what is motivating us a lot is the joint venture, which will be called Itaú BMG Payroll. It is a bank exclusively payroll. BMG will be a member of 30%, BMG shareholder will put US $ 300 million of its own funds to the capital of the bank and Itaú will contribute R $ 700 million. It is a bank that is born with a worth of $ 1 billion, which is very good. And this bank we have to leverage up to 11 times. And obviously that the bank will grow too, because 70% of the production of BMG today payroll goes all to the new bank and a very good condition, because Itaú will move into this joint venture a cost of funding that is the same as its agencies have. To give a reference, Itaú agency today must have a funding cost around 105%, while BMG has a cost of 130% because the money was scarce. So that alone gives us a very good room to grow, to develop and benefit the customer.”

-A part of the payroll loan portfolio of BMG moves to the joint venture?
“BMG now has a portfolio of R $ 29 billion. That’s BMG. From the establishment of the joint venture, which I produce monthly – BMG today is around R $ 600 million and we’ve got to make a US $ 1 billion – is Itaú BMG Payroll. That’s our goal at the new bank. We want to make $ 1 billion per month in the new bank and we know you have a condition for this, we have a network of approximately 700 correspondents and all remain at BMG and will also be registered in Itaú BMG.”

-But it will not be an internal competition?
“No, by the following, it will be very well defined. What happens: we have a current portfolio at BMG where the customer is always refinancing. He takes a loan of R $ 1000, it paid 30% of that loan and back wanting more money. Everything is refinancing we’ll do the BMG and everything is new contract we do at Itaú BMG. So it has no difficulty.”

-The trend is that the portfolio of payroll BMG decrease or accommodate to this new reality?
“It’s true. Yes it will happen. But only we will grow other assets, we’ll have lower costs. To give you an idea, from the moment that we announce this partnership, our cost of funding has already fallen dramatically. one credit that was in CDI plus 3% or 3.5% fell to CDI plus 2%. Then dropped sharply. The term deposit itself, which on the market today, with the crisis outside and the internal crisis was difficult, I have been back to capture. Customers returned to make investments in CDB.”

-Today, what is working with receivables in the bank and what the prospects for growth? “That receivables portfolio is a portfolio that we are very excited about it. BMG came to have until December last year, R $ 2.5 billion and then, with the crisis, of course, there was an insured and not grow more. Today it is around R $ 1.7 billion, but it’s a wallet that you can grow very fast. In the last months of last year the bank was producing around R $ 500 million per month this receivables portfolio. And we will re-activate this portfolio.”

-How much is the production of this book today?
“Today is around R $ 150 million per month. So we’ll go back to a level of R $ 500 million. And the great advantage of this card is that it is very safe because we operate with companies that have signed contracts with Petrobras, with the City Hall, the Municipality of Belo Horizonte and the football clubs that have contracts with the world and that anticipate receivables.”

-You can return to this level of R $ 500 million despite the current crisis situation, but restrictive?
“Sure. Of course we will take all necessary care. Today has a high default rates in financial markets, but as our credit is factored, had no problem of default. On the contrary, our default fell, she reduced because it is consigned. Because I’m quoting this, because the receivables that we operate is a clear and certain receivables and the company, which are large companies will pay for that vendor on the agreed date. So it’s kind of a payroll. How do you see the medium-term perspective.”

-How do you see the medium-term perspective. What the government is doing will be enough for the country to return to growth to 4% rates?
“We understand that government policy is right. We have no fear that Brazil will have a problem. Do not believe it and I see that with this partnership now, BMG has 5 million customers in the payroll, Itaú can add another 3 million customers in the payroll and we can grow even more because Itaú paid payroll of several companies . And this is a segment that opens to BMG in this joint venture. I’m going to also operate employees of private companies and that there is a giant market. With this partnership, the risk rating agency Fitch placed the BMG under evaluation.”

-What does this mean?
“This is very good. They want to understand the right business, which is very good for us because in a bad market currently have a rating increase will be spectacular.”