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Bloomberg Línea — The dispute among Brazil’s largest banks for high-income clients and the private segment has crossed borders and is becoming fierce in the US state of Florida as, in the last few months, the offensive has escalated to hiring new executives, opening new operations and aggressive investment in marketing.
The background is the growing presence of high-income Brazilians who visit, invest in or live in the United States, mainly in the so-called Sunshine State.
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The services offered by Brazilian banks in the state include real estate financing, investments, international transfers, and even help with immigration planning.
Miami, Orlando and Fort Lauderdale are the most sought-after cities as the banks aim to capture clients.
The most recent move was made by Bradesco (BBDC4), which has strengthened its offshore operations as part of its strategy to gain market share in the high-income segment, and which is more resilient to adverse economic cycles. In April, the bank inaugurated the new Bradesco Bank headquarters, formerly BAC Florida Bank (which it acquired in late 2019), in Plaza Coral Gables, a prime area of Miami.
In a 43,000-square-foot space spread over two floors, Bradesco Bank is located in one of the commercial complexes considered among the most modern in the city, with offices, stores, restaurants and a hotel. The design of its new unit in Miami was inspired by the unit located on Faria Lima Avenue in São Paulo.
Bradesco Bank has about 10,000 clients.
“When we bought BAC in 2019, the service was more focused on the Latin American public. Today the number of Brazilians represents more than 50% of the client base. Our strategy is to grow in the segment of high-income clients, private clients, and the prime segment, who want to have a portion of their investment in the US. It is a bank with a strong in-house financing focus,” Guilherme Leal, director responsible for Bradesco Private Banking, told Bloomberg Línea.
The executive said that the number of Brazilians who open an account in the US, with the right to a credit card, through the digital platform called Bradesco Invest US, without needing to be a resident, is growing.
According to Leal, with funds starting at $10,000 it is possible to invest in assets in the American market; and, for clients in the private segment with more than $1 million to invest, in asset management. Bradesco has a partnership with BlackRock for the investment area targeting such clients.
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Itaú and Avenue
Miami is also home to Itaú's hub for Latin America in the US - Brazil’s largest bank is present in Argentina, Chile, Colombia, Paraguay and Uruguay. One of the main - and most evident - investments of the largest Brazilian bank in Florida takes is its sponsorship of the Miami Open, one of the most traditional and important tournaments of the ATP professional tennis circuit, since 2015.
The bank has had a presence in the city since 2007. According to Itaú, there is a growing interest of Brazilians in diversifying their assets abroad, something that leverages the growth of Itaú Private International.
Among the services most sought after by its clients outside Brazil are wealth planning (including tax, succession, pre-immigration and family governance), in addition to banking (such as cards, insurance, foreign exchange) and credit (liquidity, real estate credit, agribusiness, guarantees).
“Our open architecture contemplates investment and diversification opportunities in many forms and with many products to meet the demand of any private client, from ETFs, bonds and shares to private equity, real estate, venture capital, hedge funds and others,” Itaú said in a statement.
In July last year, in a move in the same direction, Itaú acquired the brokerage Avenue, which operates in retail with Brazilian clients interested in investing in US market assets.
“As a platform that offers Brazilians access to the international market, whether it is investment or financial services, [...] we have an office in Miami with professionals who build relationships with investors and clients. The decision to come to Miami was based on the ability to attract local talent and professionals and the proximity to the public that we seek,” Carlos Ambrósio, director general of Avenue in Brazil, told Bloomberg Línea.
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Neobanks in the mix
But not all banks directly target the private or high-income segment. Inter (INTR), for example, acquired YellowFI, a mortgage origination and fund management company in the US, in February of this year; two years earlier, in 2021, it had already acquired US fintech Usend, which focuses on international remittances made by resident immigrants.
Inter’s CEO, João Vitor Menin, told Bloomberg Línea in February that the bank had about one million global accounts opened in US dollars, with more than $100 million in deposits and investments.
XP (XP) also has an office in Miami. In the US, the work started from the demand of a dedicated core to serve single and multi family offices. More recently, Guilherme Benchimol’s company decided to make an aggressive investment by sponsoring the Aston Martin F1 team, which included taking private and wealth segment clients to the Miami Grand Prix in May.
One bank that has been paying more attention to private and wealth management clients in Florida is BTG Pactual (BPAC11).
However, both BTG and XP declined to comment for this article.
Investment in real estate
The focus of Brazilian banks in real estate financing in the US, highlighted by Bradesco and Itaú, can be understood by a ranking. Brazilians are in the top 10 among foreigners who invest the most in real estate in South Florida, according to a report on real estate investments by Borrero Corp.
The options of properties for use and investment start at $500,000 in downtown Miami, for example. In regions such as Sunny Isle Beach, investors will find higher standard projects, starting at $5.5 million. In Orlando, properties start at approximately $500,000, with the same purchase conditions seen in Miami for foreign buyers (30% down payment and financing the rest).
“The possibility of purchasing houses or apartments in Florida for rental income is one of the most attractive aspects for Brazilian investors. It is a low-risk business and generates cash flow with rents, because the properties can be purchased fully furnished and ready-to-live-in or to rent out,” said Rodolfo Milanez, a broker who represents the brokerage firm in Brazil.
Most high-income clients in Brazil are generally familiar with the market, Milanez says.
“They may also be looking for asset protection and to have a vacation home option for the family on trips to Florida. Sometimes, the acquisition may be only related to investment, or even just related to the coveted lifestyle of South Florida,” he said.
Translated from the Portuguese by Adam Critchley
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