Solid performers that buck the trend
Brazil is not the easiest of places to run a bank right now but Banco Itaú has had its best year ever in terms of profit and growth. The bank excels because of its adaptability to the volatility of the Brazilian market. "Living in Brazil is quite different to living in Switzerland," says Roberto Egyudio Setubal. "It is more volatile. You have to learn what to expect and always be very smart about changes in the market."
Banco Itaú has long pursued a strategy of growth through acquisition. In the past four years alone, it has acquired three banks in Brazil, one in Argentina, and three insurers. The most recent acquisition was Beng, the bank of the Brazilian state of Minais Gerais. All the acquisitions were paid for through internal generation of capital from retained profits rather than new capital or debt.
Itaú's adaptability means it has become the most profitable of Brazil's banks. This year (to September 1998), it made a profit of R599 million ($500 million) and an 18% return on equity on an annualized basis. Premiums in its insurance business increased 30% in the first half of this year over the same period last year.