February 25, 2019 / 10:42 AM / 3 months ago

UPDATE 2-Brazil's BTG Pactual sees management business growing 30 pct in 2019

(Adds CFO comments)

By Carolina Mandl

SAO PAULO, Feb 25 (Reuters) - Brazil’s Banco BTG Pactual SA expects its assets under management to grow roughly 30 percent in 2019, Chief Financial Officer João Dantas said in an interview on Monday.

Net inflows to its wealth and asset management businesses were 26 billion reais ($6.94 billion) in 2018. Total assets under management reached 327 billion reais in December.

The bank forecast follows new hirings for its asset management unit earlier this month, such as former Finance Minister Eduardo Guardia to be chief executive and a veteran BlackRock Inc portfolio manager to be head of equity funds.

One of the bank’s main bets is in its online brokerage, known as BTG Pactual Digital, which captures clients to its products, as well as to third-part products.

Asset management firms in Brazil have benefited from the country’s gradual recovery and all-time low interest rates, which tend to push investors into investments with higher fees and out of plain vanilla government bond funds.

BTG reported a 4.4 percent decrease in fourth-quarter recurring profit to 711 million reais on Monday, as expenses went up and offset higher revenues.

The bank’s total revenues rose 13 percent from the year-ago quarter to 1.549 billion reais, mainly driven by higher fees from asset and wealth management.

Dantas also foresaw the bank’s loan book will expand 30 percent in 2019, with disbursements to companies in Brazil, Colombia and Chile. Last year, it rose 32.9 percent, reaching 38 billion reais.

“We already see a higher demand for corporate loans and we have capital to support loan book growth,” the CFO said.

The Sao-Paulo based bank reported an annualized return on equity, a measure of profitability, of 15 percent, up 0.7 percentage points from the previous quarter.

The bank also posted a 328 million reais gain with two investments in companies, Petrobras Oil and Gas BV (Petro Africa) and Eneva SA.

Dantas said BTG is still awaiting regulatory approval to have its founder André Esteves resume his role as partner in a group of controlling shareholders, as announced in December.

Esteves was forced to leave his CEO position and swap his controlling voting shares after he was arrested in November 2015 and prosecutors accused him of involvement in a bribery scheme. A Brazilian federal judge acquitted Esteves in July. ($1 = 3.7442 reais) (Reporting by Carolina Mandl, Editing by Emelia Sithole-Matarise and Alistair Bell)

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