Argentine Banker Rides Macri Stock Rally to Become a Billionaireby
Banco Macro founder’s net worth reaches $1.2 billion
Jorge Horacio Brito headed banking association in Kirchner era
Argentine banker Jorge Horacio Brito just became a billionaire and he has President Mauricio Macri to thank for it.
As chairman, chief executive officer and the largest individual shareholder of Buenos Aires-based Banco Macro SA, Brito’s wealth has surged with Wall Street’s embrace of Macri’s finance-friendly policies.
Brito, 64, who doesn’t appear on any international wealth ranking, joins the Bloomberg Billionaires Index with a net worth of $1.2 billion, mostly from a 20 percent stake in Macro valued at more than $850 million. The bank’s 21 percent rally in U.S. dollar terms this year is the largest among Argentina’s four biggest publicly traded banks, which have been buoyed by the new president’s support for the financial industry in South America’s second-largest economy.
The remainder of Brito’s wealth comes from a stake in publicly traded beef company Inversora Juramento SA that’s valued at about $200 million, as well as interests in energy and real estate, including close involvement in the overhaul of the now-tony Puerto Madero waterfront district in Buenos Aires. Brito declined to comment on his fortune.
Argentines voted for deep change in November, electing Macri, a two-time Buenos Aires mayor and center-right opposition leader, who ended 12 years of leftist populism. He introduced a program of economic liberalization, lifting caps on personal loans, giving banks the leeway to set their own fees, and agreeing with holdout investors to settle claims from Argentina’s decade-old debt default. Macri also scrapped a tax on farm exports in December, which helped fuel a 36 percent surge for Inversora Juramento in dollar terms over the past year.
Brito started out in the 1970s with a $5,000 loan from his mother, teaming up with brother-in-law Delfin Carballo to create their own lender. The duo bought Macro in 1985 and began snapping up lenders in a consolidation that culminated in a 2006 listing on the New York Stock Exchange. Carballo owns a stake in Macro valued at more than $800 million. Carballo declined to comment through a Macro press officer. Macro shares dropped 1.8 percent today as of 1 p.m. Buenos Aires time.
Brito spent 13 years as the head of the country’s banking association, a position that afforded him access to the upper echelons of government. He had close ties with the Kirchner dynasty, which ended last year with the defeat of an ally of former President Cristina Kirchner. The banking association under Brito financed the road program of President Nestor Kirchner after he was elected in 2003. American diplomats later described Brito as one of the closest advisers to Kirchner in the financial sector, according to Wikileaks cables leaked to La Nacion in 2011.
His relationship with Cristina, Nestor’s widow, was less cordial. She famously lashed out at Brito in more than one Twitter storm, including an accusation in 2013 that he favored a currency devaluation that would “destabilize” the country’s economic growth.
Prosecutors are investigating Banco Macro’s links to Cristina Kirchner’s vice president, Amado Boudou, and have requested that Brito appear as a witness in a case against Boudou, who’s accused of abusing his power to gain control of the company that prints Argentina’s currency and later helping the business get tax breaks. The company that Boudou allegedly used to acquire the printer moved funds through Banco Macro accounts, court documents show. Boudou has denied any wrongdoing. Brito is not a suspect in the case and wrote to the judge in the case in 2013, saying he is willing to cooperate with the investigation.
Macro’s rally under the new president is an indication of Brito’s ability to position himself for any political environment, said Fernando Suarez, an analyst with Raymond James in Buenos Aires.
Banco Macro’s profit jumped by 26 percent in the first quarter from the year-earlier period to 1.4 billion pesos ($93 million) on higher fees. The bank is among those in talks with Citigroup Inc. to buy its Argentina retail banking services and credit card operations.
Brito told Bloomberg in an interview in November that Argentina could gain an investment grade rating in 2016 if Macri tackles policy changes such as lifting capital controls and publishing reliable economic statistics. Moody’s Investors Service upgraded Argentina in April to B3, six levels below investment grade, and S&P Global Ratings and Fitch followed with upgrades in May.
“Brito had a relatively good relationship with Kirchner, but under this new government he’s doing just as well,” Suarez said. "Investors clearly see new opportunities in the finance sector."