In this Q&A interview with ardent football fan and father of three, Luiz Severiano Ribeiro, the Global Head of Private Banking at Brazil’s Itaú Unibanco, discusses the bank response to the Covid-19 pandemic. Its provided structural support to customers to weather the crisis and support for emergency government initiatives.

 Question: Q1. Please briefly describe your career trajectory and interests?

Answer: A1. Family is my highest priority, as I’m married with three children. Born, raised and educated in Rio de Janeiro, Brazil, i am an ardent fan of the local team, Flamengo, who’ve produced Zico and many other famous footballers. I graduated from Pontíficia Universidade Católica do Rio de Janeiro, PUC-RJ with a degree in Business Administration and moved to São Paulo to work in the financial markets. I’ve since completed an academic extension at Harvard University and a US leadership programme at The Wharton School.

I started by career in brokerage at Itaú Unibanco in 2002. Since then, I’ve had several leadership roles in Itaú’s local and international wealth management business. I’m currently Global Head of the Private Bank at Itaú Unibanco, overseeing its operations in Brazil, the US, Europe and Latin America.

Q2. What has been your biggest challenge this year?

A2. Covid-19 of course. The most critical role of any bank in such an emergency is to remain liquid and healthy, to help our economies avoid systemic crises. Second to that, a bank needs to do its job well, which is to cultivate the economy in which it operates.

Today we feel a special responsibility to support our customers, whether they be individuals or companies, in their difficult journey through this pandemic crisis, so that they will soon be able to resume their normal lives and business operations with the least possible impact. To this end, we are acting on two fronts: providing structural support to our customers and support for emergency government initiatives.

Customers have been supported by our on-going Travessia programme, which has delivered:

  • R$16.2 billion (US$2.91bn) in local real currency in debt extensions and R$7.4 bn in new loans with terms of up to five years, plus grace periods of up to 180 days for more than 233,000 small and medium-size enterprises (SMEs) with revenues of up to R$30 million.
  • R$37 billion in debt extensions and R$6 billion in new loans have been made with terms of up to six years and grace periods of up to 120 days for more than one million people.

We’ve also been working in partnership with the government to disburse emergency aid, which has so far distributed:

  • Payroll financing: R$1.6bn disbursed to finance 660,000 salaries.
  • Emergency aid: bringing benefits to 1.33 million people.
  • Emergency benefits:9m customers have received approximately R$2.4bn under the BEm (Emergency Benefit for the Preservation of Employment and Income) programme.
  • Pronampe: 37,000 of the bank’s micro- and small business clients received a total of R$ 3.7bn to fortify their businesses.

On the investment banking side, we have been focusing on the issue of credit to prevent a crunch. Since the beginning of the Covid-19 crisis, we’ve doubled the granting of credit to companies in different sectors of the economy. The market is unlikely to end up completely frozen. Indeed, the expectation is that 40 transactions will be priced in the market by October, moving R$60bn via IPOs and follow-ons.

Itaú Unibanco has also donated R$1bn (US$200m) to the largest philanthropic initiative in Brazilian history, the Todos pela Saúde programme. This is supporting Brazil’s public health system in mitigating the pandemic by distributing supplies and personal protective equipment (PPE) and funds to mitigate the worst effects on the least fortunate in Brazilian society.

Todos pela Saúde is still receiving donations from people and companies, which now total around R$250m extra, so we intend to maintain the expert advisory team we created to assist the project and keep the team at the bank mobilised to help for as long as we can contribute. The bank is also imminently due to open two new Covid-19 testing centers, in partnership with Fiocruz, and is sponsoring the development of a vaccine.

Q3. How has this financial support been possible: what is the state of the bank’s finances?

A3. Itaú Unibanco has more than 95 years of history. We have reached the position of Brazil’s largest bank, in terms of assets based on data from the Central Bank of Brazil, and according to Interbrand are the most valuable brand in Brazil worth R$33.5bn. You can see the graph here to gauge our scope and size. We are indeed a universal bank.

Our  current CEO, Candido Bracher, has outlined six strategic priorities for the coming years to ensure future growth:

  • Customer-centricity,
  • Digital transformation,
  • People management,
  • Risk management,
  • Sustainable development,
  • & Internationalization.

Q4. What about your Prviate Bank unit and its future plans?

A4. Itaú Private Bank has been for many years the leading player in its segment in Brazil. As of 2019, we had R$511bn in assets under management (AUM) and a 30.7% share of the local market, which is a 1% increase. Last year we secured the most net new assets in a single year in our history, R$41bn, helping us burst through that R$500bn AUM mark. This makes us double the size of the number two player in Brazil.

Our financial results have been positive: revenue grew by 20% and net income by 36% last year, even as we maintained our commitment to efficient resource management, which enabled us to achieve a 61.7% cost-income ratio.

For Itaú Private Bank expanding our offshore operation is a future and present priority. Our goal is to be the bank for Latin American and Brazilian customers investing internationally. We want to increase our international assets under custody from US$23.8bn up to US$35bn –  that is to say we want to grow by 11% in just over three years.

We operate in Miami, Zurich, Bahamas, Santiago de Chile and, as of February 2020, in Lisbon, Portugal, with the sole objective of helping our customers, especially Brazilians, to invest more internationally and more wisely. Clients are looking abroad for opportunities to allocate their resources, especially with the current low interest rates in Brazil. Our future strategy has four key pillars:

  • The centrality of the client
  • Sustainable partnerships
  • Continuous evolution, including keeping abreast of technological changes
  • Relationships built on trust.

Technology
Technology has completely changed the business world, and private banking is no exception, but it’s part of the continuous evolution pillar and is jsut something we have to keep up with. The presence of new fintech entrants is growing, driven by the use of innovative technologies, but it is enhancing competition in a healthy way in my opinion, and it’s also something we can harness. We see this fintech and data movement as an opportunity to improve our relationships with customers.

We want to win and keep customers by offering them quality products, a differentiated experience and time savings. As personalised service becomes more important, data science and data itself plays an ever more critical role – it helps us map the preferences of each client, anticipate their needs, and surprise them by adding unexpected value.

Accordingly, data analysis enabled by our digital capabilities, has become a key means of studying our customers’ habits, hobbies and consumption patterns. It allows us to identify client preferences with respect to our offer, events, reports and media. This information helps us tailor our investment recommendations, select the most appropriate tone and channels for communication, and develop unique events and experiences. It optimises our services.

Q5. What is the most crucial leadership skill in your opinion and your tip for newcomers in senior roles?

A5. I truly believe that if you want to become a successful international business leader, transcending your own cultural perspective and learning how business is done in different contexts is essential. If you’ve teams working abroad, as I do, then it’s important to be close to them, while allowing them a sense of ownership and empowerment to get the job done.

My tip is to cultivate a lifelong sense of curiosity. The world is constantly evolving. Without intense curiosity and a desire to learn, you will be left behind and increasingly unable even to converse with, much less keep up with your peers. Staying abreast of new opportunities requires a humble awareness that what you know is never enough and that you always have more to learn.

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