February 20, 2013 11:16 pm

BTG Pactual consolidates after IPO

BTG Pactual has reported a 69 per cent increase in net profit in its first annual results since it held its initial public offering last year.

The group, Brazil’s largest independent investment bank, controlled by billionaire businessman André Esteves, said net profit for the year reached R$3.26bn as higher asset management fees and strong performances in principal investments and trading offset a softer year for investment banking.

“Revenues from asset management increased substantially in 2012, by 135 per cent, when compared to 2011, due to significant growth in management and performance fees,” the bank said.

BTG reported net profit in the fourth quarter of R$854m, up 7.7 per cent from the previous three months and above a Thomson Reuters poll of analysts that had forecast R$677.5m.

BTG Pactual was able to defy a bleak year for equity offerings last year by staging a successful IPO that raised $2bn and was the seventh largest in Brazil on record, according to Dealogic.

Last year, Brazilian mergers and acquisitions volumes fell 18 per compared with a year earlier and equity capital market issuance 32 per cent.

But debt capital markets volumes hit a record high of $67bn, driven by a 31 per cent increase in international offerings compared with 2011.

BTG was fourth on the league table for debt capital markets domestic offerings and 10th for international bond offerings, while for announced mergers and acquisitions volumes it was placed second and for equity offerings first, Dealogic said.

During the year BTG finalised its takeover of Celfin, a Chilean brokerage, and Bolsa y Renta, a Colombian securities firm.

“We completed two landmark transactions, consolidating our leadership in Latin America together,” Mr Esteves said in a statement.

The deals are part of efforts by the bank to strengthen its hold in Latin America while establishing links with fast-growing markets throughout the world.

The bank has signed a strategic partnership with VTB Capital in Russia, invested $100m in China’s Citic Securities and counts among its shareholders Singapore’s GIC, China’s CIC and Abu Dhabi Investment Company.

In its results, BTG said revenue was R$6.82bn in 2012 compared with R$3.2bn a year earlier, boosted by a sharp rise in sales from principal investments from R$181.3m to R$2.34bn, the bank said. The jump was due to its global markets division.

“Higher global markets revenues reflect good performance of all our strategies, especially US mortgages, as well as emerging markets and global credit strategies, which benefited by the improvement in macroeconomic conditions in developed markets in 2012, when compared to 2011,” BTG said.

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