UBS Expands Into 'Brazilian Texas' to Reach Newly Minted Millionaires

What You Need to Know

UBS has 1,300 employees dedicated to 50,000 Latin American private-banking clients, including 570 wealth advisers.
“Most banks never explore the interior much,” Sylvia B. Coutinho, president of UBS in Brazil and head of wealth management in Latin America, said in an interview in Sao Paulo.

UBS Group AG is branching out into rural Brazil to find millionaires created by rapid growth in the agribusiness and tech industries.

The Swiss bank plans to open a wealth-management office in the midwestern city of Goiania, the capital of what’s known as Brazilian Texas because of its similarities to the farm-rich U.S. state. Another will open this month in Recife, a beachfront city in the Northeast that’s developing into a technology hub.

“Most banks never explore the interior much,” Sylvia B. Coutinho, president of UBS in Brazil and head of wealth management in Latin America, said in an interview in Sao Paulo.

“Agribusiness has grown significantly in Brazil even when GDP shrank, and most of the sector’s entrepreneurs are exporters, hedged in dollars, who are benefiting from an increase in commodities prices,” said Coutinho, who along with an MBA has a bachelor’s degree in agricultural engineering and a post-graduate degree in agricultural economics.

Diverging fortunes in the nation’s private-banking industry show why UBS is targeting the countryside. While the overall market expanded 5.2% to 1.87 trillion reais ($370 billion) under management this year through September, private banking in just the Midwest surged 22%, to 54.6 billion reais, according to Anbima, the capital-markets association.

While Brazil’s biggest banks are expanding in private banking, others, including JPMorgan Chase & Co. and BNP Paribas SA, have abandoned the business entirely in Brazil, deciding that they lacked the necessary scale to compete profitably.

UBS has another advantage in the fight for rich clients: a joint venture it struck with state-owned Banco do Brasil SA for investment banking in South America and brokerage business in Brazil. Banco do Brasil is the country’s largest lender to agricultural companies, and has deep relationships with the sector’s entrepreneurs.

UBS has 1,300 employees dedicated to 50,000 Latin American private-banking clients, including 570 wealth advisors. Its wealth-management business currently has offices in Sao Paulo, Rio de Janeiro and the southern city of Curitiba.

Record Harvest

Gross domestic product from Brazil’s agribusiness sector expanded 24% in 2020 and 8.4% last year, according to Cepea, a center for economic studies at the University of Sao Paulo’s agricultural school. In the first half of this year, it contracted 2.5% as input prices climbed. Agribusiness represents about a quarter of the nation’s total GDP.