UBS's Brazil unit to make quiet return to investment banking: sources
By Guillermo Parra-Bernal and Aluisio Alves
SAO PAULO (Reuters) - UBS AG UBSN.VX will restart investment banking operations in Brazil as early as next week, sources said, almost five years after Switzerland's biggest bank sold its highly profitable securities unit there following the global financial crisis.
Two sources, who are not authorized to speak publicly on the matter, said on Friday that UBS and Brazil's central bank agreed on setting March 12 as the date to activate the investment-banking license.
Sought for comment, UBS said it would continue to focus on wealth management, client solutions and its sales and trading business, including equity research, in Brazil.
UBS lost its investment banking license in 2009 after selling Banco UBS Pactual back to its original owners, a group led by billionaire financier Andre Esteves. The sale price of$2.5 billion was about $600 million less than what the Swiss lender paid for the unit in 2006.
Months after the UBS Pactual buyback, Esteves created Grupo BTG Pactual SA BBTG11.SA, which is now Latin America's largest independent investment bank.
UBS's Brazilian unit is unlikely to prospect for new investment banking clients before receiving authorization from its parent in Zurich, one of the sources said. The team has 16 bankers and could hire two or three more, the source noted, adding that the unit will probably not lend money in order to win investment banking business.
UBS is also trying to expand its financial advisory business in Brazil despite Chief Executive Officer Sergio Ermotti's push to focus on wealth management globally and limit the use of lending to fetch deals.
The license, which took three years to be approved, comes at a time when foreign investment banks are losing ground to their local counterparts amid sluggish capital markets activity in Brazil since 2011. Continued...