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Banco do Brasil Plans to Open a Broker-Dealer, Caffarelli Says

Banco do Brasil SA, the largest bank in Latin America by assets, plans to open a broker-dealer to boost its equity-underwriting business in Brazil.

“We plan to be the biggest bank in the Brazilian capital markets as soon as possible,” Paulo Rogerio Caffarelli, the firm’s vice-president for wholesale banking, said in a telephone interview. “We plan to offer all types of investment-banking services to our clients and will invest to do so.”

Banco do Brasil, which is controlled by the government, is the nation’s fifth-biggest equity underwriter this year, the same rank it held for all of 2012, according to data compiled by Bloomberg. Owning a broker-dealer would allow the Brasilia-based bank to expand in the business by allowing it to sell stocks from equity offerings on its own, rather than relying on third-party broker-dealers.

Caffarelli said his company is planning to open the broker-dealer in partnership with another firm, which he declined to name.

Banco do Brasil said it August it postponed for an unspecified time a proposal to increase its stake in auto lender Banco Votorantim SA. Banco do Brasil already holds 49.99 percent of the voting shares and 50 percent of the preferred shares of Sao Paulo-based Banco Votorantim.

Banco do Brasil’s plan was to use Banco Votorantim’s local brokerage to build an investment bank with a more flexible wage policy than state-controlled companies must follow, two people familiar with the matter said in January.

Votorantim Financas SA and Banco do Brasil injected 2 billion reais ($905 million) into Banco Votorantim last year to reinforce the lender’s capital.

To contact the reporter on this story: Cristiane Lucchesi in Sao Paulo at clucchesi5@bloomberg.net

To contact the editors responsible for this story: David Scheer at dscheer@bloomberg.net; Christine Harper at charper@bloomberg.net

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