SAO PAULO, Feb 25 (Reuters) - BB Seguridade Participações SA , which oversees state-controlled Banco do Brasil SA’s insurance business, expects a newly opened dental joint venture to account for 5 percent of net income within the next three or four years, Chief Financial Officer Werner Suffert said on Wednesday.
Brasildental, the venture in which BB Seguridade has a 75 percent stake, hopes to capture about 1 million clients this year, its first of operations, Suffert said in a phone interview in São Paulo. Dental care provider Odontoprev SA owns the remaining 25 percent of Brasildental.
This year, Brasildental’s contribution to BB Seguridade earnings will be “minimal,” Suffert added.
Currently, the Brasilia-based company receives 80 percent of its earnings from sales of residential and farming policies, savings plans and insurance brokerage revenue. BB Seguridade expects net income, or profit before one-time items, between 3.6 billion reais and 3.9 billion reais ($1.25 billion and $1.37 billion) this year, compared with 3.2 billion reais in 2014.
Both BB Seguridade and Odontoprev introduced the venture at an event on Wednesday in São Paulo. Brasildental wants to expand outside Brazil’s most populated regions and in regions where corporate plans lack differentiated dental care services, executives said.
“The market is concentrated around corporate plans, but there’s a large swath of the population that is still unattended, with growth potential in several regions of Brazil,” Julio Cezar Alves de Oliveira, Brasildental’s chief executive officer, told reporters at the same event.
BB Seguridade rose 1 percent to 33 reais on Wednesday. Odontoprev added 0.5 percent to 10.15 reais. (Editing by Diane Craft)