After strong growth during the third quarter of the year, supported by record revenues, and in the midst of a polarized country after the presidential election, The Brazilian investment bank BTG Pactual was cautious about the reforms that could be promoted by the future President of his country, Luiz Inácio Lula da Silva, but he also hopes that his economic management will be “good”.
In a conference with analysts, the company’s CEO, Roberto Balls, explained that it is not yet clear how a possible economic slowdown in the hands of the new government will affect the loan portfolio.
“We still have to understand what the fiscal policy of the elected government will be and what the implications are for public debt. and for, say, tax levels and how that affects businesses,” he said Tuesday.
In addition, he reaffirmed that it is necessary to understand what the reform agenda of the next government is. “And we need to understand what the plan of the public sector banks will be for Petrobras,” he pointed out, although he was clear in stating that he believes that “good economic management will continue with a little change here and there, given the inclinations of the elected government. But we continue to anticipate a responsible economic policy.”
In this context, Balls indicated that at BTG Pactual they do not anticipate, at this time, changing their strategy.
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BTG Pactual has strengthened its operations through acquisitions that have added value to the company. In this regard, analysts asked if this was still an option, specifically a digital bank. This was confirmed by the CEO of BTG, stressing that they are always looking at possible acquisitions.
“We have a history of being quite active on that. Basically we see two types of acquisitions. Those that help us add or accelerate new product offerings to our customer base or those acquisitions that help us scale our existing businesses faster. So we continue to analyze these two opportunities”, argued the executive.
He added that “recent market volatility, more restrictive private equity and venture capital markets, make these opportunities more frequent.”
The company does not seek transformational acquisitions, but acquisitions that you believe will complement the finance company’s product offering or help you speed time to market or scale current businesses.
Balls pointed out that the investments they have made in technology during the last six years have allowed them to enter new market segments and launch products, among other things, so “we hope that during the next few quarters we can continue to increase the level of profitability to as we continue to explore synergies or maturation.”
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During the third quarter of 2022, BTG Pactual announced total revenues of 4,756 million reais (approximately US$924 million) and adjusted net income of 2,302 million (approximately US$447 million), this demonstrated higher operating leverage, which led at an adjusted efficiency ratio of 38.1%. The Basel index remained at 15.2%.
“Despite more difficult market conditions during the quarter, our revenues showed strong growth across all business units,” the company highlighted.
The Investment Banking area recorded its best quarter of the year, with revenues of 524.8 million reais (about US$100 million), an increase of 8.1% compared to the last quarter.
“In this quarter, we recorded record revenue from DCM and M&A. We continue with a solid pipeline for the coming quarters”, they stressed.