June 23, 2020 / 11:07 AM / 14 days ago

UPDATE 1-Credit Suisse agrees deal to buy into Brazilian digital broker modalmais

(Adds context, details)

By Carolina Mandl

SAO PAULO, June 23 (Reuters) - Credit Suisse has agreed a deal with digital broker modalmais that could see it buy a stake of up to 35% in the Brazilian company, the Swiss bank said in a statement on Tuesday.

Modalmais has nearly 1 million clients, to whom Credit Suisse expects to sell its wealth management services and products. Currently, modalmais has 10 billion reais ($1.90 billion) in assets under custody.

Credit Suisse did not specify the time frame it may reach a 35% stake in modalmais.

Digital brokers have grown at a breakneck pace in Brazil as the country’s benchmark interest rates reached a record low level of 2.25%, forcing many investors to flee from government bonds to equities and sophisticated funds.

“This transaction further enhances our ability to serve our clients digitally while getting access to additional client segments in a fast growing environment,” Philipp Wehle, Chief Executive of International Wealth Management at Credit Suisse.

Modalmais has among its main competitors in Brazil firms such as XP Inc, Banco BTG Pactual SA and Fosun International Ltd’s Guide Investimentos. ($1 = 5.2532 reais) (Reporting by Carolina Mandl, editing by Louise Heavens)

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