Goldman-Samba? Bank Ups Brazilian Presence
Bloomberg is reporting that lead investment bank Goldman-Sachs (NYSE:GS) will increase its man-power in Brazil (NYSE:EWZ) this year, upping its workforce in the emerging market by a target of 20% in 2011. “The Brazilian unit, which raised headcount to about 300 from 200 last year, plans to invest during 2011 in research, asset management, private banking, sales, investment banking and trading, the group’s president, Valentino D. Carlotti, said in a video-conference interview last week from Goldman Sachs’s headquarters.”
The Brazilian economy continues to serve as a mouth-watering profit target for investment banks, with growth rates of 7% last year and an additional 4% this year expected. Goldman’s effort to boost its own name in the region comes after several failed attempts to purchase established local outfits. In 1998 the bank tried to purchase Brazilian financiers Banco de Investimentos Garantia SA, who eventually sold to Goldman rival Credit Suisse (NYSE:CS). Sachs tried again in 2005 to buy its way into Brazil, offering to acquire Banco Pactual SA, but again its efforts were stymied when the bank sold to UBS (NYSE:UBS).
Goldman’s latest effort comes in a push to establish itself as a regional leader in time for the coming World Cup (2014) which will take place in Rio de Janiero. Goldman currently has an establishment of 300 employees in Brazil, making it the third largest U.S. bank in the region by headcount. JP Morgan (NYSE:JPM) is first in that department with over 600 workers on location, and Bank of America (NYSE:BAC) trails in second with nearly 400. Goldman-Sachs listed Brazil, in addition to India and China, as one of the company’s top targets for expansion this year. Goldman Sachs Earnings: Warren Buffett Extracts Pound of Flesh>>
American investment banks continue to face stiff competition from local players, such as Banco Itau BBA International (NYSE:ITUB), a representative of whom commented, “They’re going to have a hard time getting market share from us because we have long-term, well-established relationships and we have a big balance sheet locally.”