Marcio Alaor of BMG helped to create a new bank


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In a week, Banco BMG dropped bets that would be sold to BTG or Bradesco and closed an unprecedented partnership with Banco Itaú, one of its greatest assets: the lead in lending recorded. Executive Vice President of BMG, Márcio Araújo Alaor celebrates the partnership that will result in the creation of a new Bank, ITA BMG Recorded, that will act solely on lending with discount on payroll and will allow the BMG to keep operating as it is today.

With the Association, the miner’s Bank will have a monthly line of 300 million R$ of the Ita to operate for three years. In 90 days, when the new Bank start operating, other 300 million monthly R$ will be made available to the joint venture and in this case will be for five years. “It’s a new segment that opens to the BMG in this joint venture. The Bank passes the Fund also employees of private companies and that there is a giant market, “says Márcio Albana in interview with Estado de Minas

The BMG was negotiating with other banks. Why the option of joining Ita?
Until last week the negotiations with Bradesco and BTG involved the purchase total, of the control. But last Saturday we received a call from Roberto Setubal (ceo of Itaú Unibanco) with another option for BMG, that doesn’t change anything in the current Bank and gives us a good perspective for the future. The Ita also gave us an interesting option because from the partnership it will give money, funding for the BMG, which is a monthly credit line of 300 million R$ to the Constitution of the joint venture – which will take around 90 days. From the time the joint venture begins to operate, it will give us funding to R$ 3.5 billion, over five years, that is, 300 million R$ per month.

The difference is that now will be contributed in the BMG and in the near future in a joint venture?
No, it’s better than that. I’m actually have funding both the BMG, which is this line R$ 300 million monthly for three years, and in the joint venture. And the BMG is still operating normally, with 30% of the payroll and the portfolio of receivables. So this is the BMG and they will keep current.

Including the operations that were acquired recently, such as Banco Schahin?
Everything stays in the BMG and nothing changes. Now, what’s motivating us a lot is the joint venture, which will be called Itaú BMG Stated. Is a bank exclusively embodied. The BMG will be 30% partner, the shareholder of the BMG will put 300 million R$ of own resources to the capital of this Bank and the Ita will contribute 700 million R$. Is a bank that is born with assets of r $ 1 billion, which is very good. And this we have Bank as leverage until 11 times. And obviously that Bank will grow too, because 70% of the production of the BMG consigned today goes all to this new Bank and with a very good condition, because the Ita will move to this joint venture a cost of catchment which is the same as their agencies there. To give a reference, an agency Ita today must have a collection cost around 105%, while BMG has a cost of 130%, because the money was scarce. So that gives us a very good margin to grow, to develop and benefit the client.

A part of the payroll of the BMG passes to the joint venture.
The BMG has a portfolio of $ 29 billion. That’s BMG. From the establishment of the joint venture, what I produce on a monthly basis – BMG today is around 600 million R$ and we’re here to make a $ 1 billion-is of ITA BMG Stated. That is our goal in the new Bank. We want to make $ 1 billion per month in this new Bank and we know you have a condition for this, we have a network of approximately 700 correspondents and all remain in the BMG and will also be registered in the Ita BMG.

But there won’t be a domestic competition.
No, by the following, this is going to be very well defined. What happens: we have a current portfolio at BMG where the customer always refinancing. He takes a R$ 1 1000 loan, it pays 30% of this loan and come back wanting more money. All we’re doing is refinancing at BMG and whatever new contract we do Itaú BMG. So, does not have the slightest difficulty.

The trend is that the enshrined the BMG decrease or settle to this new reality?
It is true. This will happen Yes. But we only will grow other assets, we are going to have lower costs. To give you an idea, from the moment that we announce this partnership, our cost of funding has already fallen sharply. a credit that was in CDI 3% or 3.5% more fell to CDI 2% more. So, fell too. The very term deposit, that on the market today, with crisis outside and the internal crisis was difficult, we’re back to capture. Customers returned to make applications in CDB.

Today what is the cute in Receivables in the Bank and what the prospect of growth?
This receivable portfolio is a portfolio that we’re very excited about it. The BMG had until December last year, 2.5 billion R$ and later, with the crisis, obviously, there was an insured and not grow more. Today she is around 1.7 billion R$, but is a portfolio that you can grow very fast. In the last few months of last year the Bank was producing around 500 million R$ per month in this portfolio of receivables. And we’re going back to activate this license.

Today the production of this wallet is how?
Today is around 150 million R$ per month. So, we’re going back to a level of 500 million R$. And the great advantage of this wallet is that it is very safe, because we operate with companies that already have closed contracts with Petrobras, with the City Hall of Rio, Belo Horizonte and the football clubs that have contracts with the Globe and who anticipate receivables.

You can return to the same level of 500 million R$ even with the current crisis situation, but restrictive?
Of course. Of course we’re going to take all the care required. Today has a high default rates in terms of the financial market, but as our credit is recorded, we had no problem of delinquency. On the contrary, our delinquency fell, she reduced, because it is formulated. Because I’m citing that, because the receivable that we operate is a receivable and liquid and that the company, which are large companies, will pay for that supplier in the date. So, it’s kind of a payroll.

How do you see the medium-term Outlook. What the Government is doing will be enough for the country to go back to grow at rates of 4%?
We understand that the Government’s policy is right. We have no fear that Brazil will have a problem. Don’t believe it and I see that, with this partnership now, the BMG has 5 million customers in the payroll, ITA can add more 3 million clients in the payroll and we can grow more because ITA pays payroll of several companies. And this is a segment that opens to the BMG in this joint venture. I’m going to operate also the employees of private companies and that there is a giant market.

With the partnership, the risk agency Fitch placed the BMG under evaluation. What does that mean?
That is a good thing. They want to understand the business the right way, which is very good for us, because in a moment of bad market have an increase of rating will be spectacular.

The financial expertise has allowed Marcio Alaor to become a part of the BMG Bank family. His influence has helped to close and abundance of deals as well help the company to expand. His latest deal has helped BMG to partner with Banco Itaú in order to create a new bank.

Brazil based Financial Institution bank BMG

The bank BMG is a privately owned financial institution that is based in Brazil. The Pentagna Guimaraes family, who has been in the financial industry since 1930, controls the bank. The family began by establishing Banco de Credito Predial S.A. The commercial bank was later renamed and called Banco de Minas Gerais S.A and it offered its products to individuals as well as institutions. The bank initially focused on wholesale as well as consumer financing. It also provided financing services for both heavy and light vehicles. It performed exemplarily well and managed to be on top of the rest in this market.
In 1998, BMG concentrated on providing payrolls loans. Other banks used BMG as a benchmark for this kind of operation. BMG formed a joint venture in 2012 with Itau Unibanco after signing an association agreement. The joint venture was referred to as Banco Itau BMG Consingado S.A. Marcio Alaor, executive vice president of BMG, was very pleased with the formation of the joint venture as well as other stake holders of the company. In the same year, the two firms signed an agreement to unify their business and concentrate on payroll loan operations. This enabled BMG benefited from this unification of business as it was able to focus on payroll credit cards as part of a strategic plan. It also focused on BMG Empresas which dealt with financing of medium sized and large companies and suppliers of large economic group. It was also able to focus on financing of vehicles. Currently, BMG is a 40% owner of the total and voting capital stock while the remaining 60% is owned by Itau Unibanco.
The bank has accomplished a lot since it’s established under the leadership of Marcio Alaor and others. In the year 2010, the bank BMG recorded profits of R $606 million and had grown by 16% as compared to its previous year. In that same year, BMG recognized its management structure. It volunteered to adopt a high level corporate governance structure. This included having a board of directors, whereby forty percent were independent members. The bank also adopted committees who were involved in making decisions for the bank. They also had a code of ethics to govern their share holders. BMG also took the initiative of adopting independent audit and Anti-money laundering program. These are the efforts that BMG has taken to ensure its efficiency.

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Now is the perfect time to Invest in Brazil

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