June 11, 2019 / 8:35 PM / a year ago

Brazil's Banco Inter seeks up to $260 mln in capital to fuel growth -source

SAO PAULO, June 11 (Reuters) - Brazilian online lender Banco Inter SA is seeking to raise between 800 million reais and 1 billion reais ($260 million) to fund new growth initiatives through a capital increase, one source familiar with the matter said.

Earlier on Tuesday, Banco Inter said in a securities filing it was considering a capital increase, without saying how much it planned to raise.

Inter intends to use the proceeds to expand its smartphone app to provide services beyond banking such as travel, food delivery services, healthcare and entertainment, the source said.

The strategy of offering a wider menu of services through partnerships is modeled on that pursued by Russia’s Tinkoff Bank, owned by consumer lender TCS Group, the person added.

The capital hike plan comes as competition in Brazil’s financial sector heats up, with retailers such as MercadoLibre Inc, Magazine Luiza SA and Via Varejo SA recently launching services including credit cards, loans and even checking accounts.

Inter also intends to accelerate loan growth by increasing offers to its 2.2 million digital checking account holders, often by pre-approving clients’ credit limits, the source said. In June, Inter pre-approved 2 billion reais in mortgages for its clients with the help of proprietary data processing tools.

Its total loan book reached 3.5 billion reais in March.

While the bank said it was mulling options including a secondary share offering or bringing onboard a strategic investor, the source said the former option was more likely.

The bank, which went public in April 2018 with an offering of preferred shares, said it plans to also list its common shares through investment units that will group one common share and two preferred shares.

Inter has been in talks to hire Banco Bradesco SA and Citigroup as advisers in the capital increase, Reuters reported in May.

Banco Inter is controlled by Brazil’s Menin family, which holds 57.9 percent of its capital and also controls homebuilder MRV Engenharia e Participações SA.

Shares in Banco Inter are up 68.4% this year. ($1 = 3.8674 reais) (Reporting by Carolina Mandl; Editing by Christian Plumb and Rosalba O’Brien)

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