Partnership with Banco do Brasil

In 2009 a strategic partnership was established with Banco do Brasil (BB), Brazil's largest financial institution, which acquired 49.99% of the voting shares and 50% of the total capital of Banco Votorantim (BV). This strategic partnership combines competitive advantages of both institutions: the asset origination capacity and agile business model of BV and strength of BB, with an extensive retail network and ample funding.

The figure below illustrates the strong complementarity between the two institutions. 

The partnership structure preserves BV's business model while boosting the capacity of both institutions to capture growth opportunities more effectively and rapidly. It enhances their ability to develop new business ventures and operate in strategic areas, adding value to BV, BB and their clients and customers, who can now rely on an even more competitive, solid and agile offering of financial services.

Since the approval of the partnership by the Central Bank, effective in September 2009, Banco Votorantim and Banco do Brasil have explored joint opportunities in various business segments, with tangible results already achieved, such as:
 

• Development of auto finance operation model: following the establishment of a partnership in 2009, BV Financeira started to operate as an extension of BB to finance vehicles out of bank branches, which has contributed to the significant growth recorded over the last three years. Over that period, BV Financeira consolidated its leading position in multi-brand dealers and significantly expanded its presence in new car dealers. Given the new economic-regulatory context, Banco Votorantim has given priority to own origination in dealer segment, in which it has a recognized expertise, and will endeavor to structure in 2012 a new BB origination model (“BV Financeira Originadora”) focused on the new car dealer segment.
• Asset securitization: under the Operational Agreement, BB regularly acquires credit assets portfolios originated by BV Financeira with recourse. The balance of assets assigned to BB reached R$ 14.5 billion in Dec.11, of which R$ 10.3 billion were auto loans and the remainder payroll loans. This program is advantageous to both institutions. It combines Banco Votorantim's high asset origination capability with BB's broad funding base. Given the new economic-regulatory scenario and the entry in force of Bacen’s Circular Letter 3,533 in Jan.12, which changes the accounting rules for credit assignment operations, Banco Votorantim and BB have worked jointly to develop a model for BV Financeira operation in consumer finance, as described in the previous item.
• Offer of investment products: BB DTVM and Votorantim Wealth Management & Services (VWM&S), the consolidating structure of Banco Votorantim’s asset management, have worked jointly to develop and distribute innovating and customized investment funds backed by receivables (FIDCs), Real Estate (FIIs), Private Equity (FIPs) and Private Credit investment funds. At the end of Dec. 11, the volume of funds associated to the partnership amounted to R$ 2.4 billion, with emphasis on FIC BB Seleção Private, FII BB Renda Corporativa, FIDC Fênix (Lojas Americanas) and FIP-IE BB Votorantim Energia Sustentável I, II & III. The latter is an Infrastructure Equity Investment Fund for Renewable Energy segment, which is a pioneer in its kind.
• Expansion of the business of Votorantim Corretora: BB is making more extensive use of Banco Votorantim's brokerage firm to trade proprietary positions, investment funds and its consumer finance segment (via BB's home broker service).
   

Updated on February 16th, 2012