UBS and Banco do Brasil have inked a deal to provide investment banking services and institutional securities brokerage in Brazil and some countries in South America.
Per the terms, UBS will hold the controlling stake with 50.01% ownership interest. Also, the investment bank will be fully incorporated into UBS' Global Banking and Global Markets platforms.
The new bank will deliver investment banking and institutional securities brokerage services in the region, covering Brazil.
This endeavor is a clear demonstration of UBS's commitment to expanding our business in South America"
In doing so, it will leverage the assets of both parties including UBS's operational investment banking platform in Brazil and Argentina along with the bank's Brazil institutional brokerage operations.
The new bank will also utilise Banco do Brasil's exclusive access rights to its corporate clients.
Moreover, the partnership will tap UBS's expertise in cash equities, exchange traded derivatives and Banco do Brasil's capital markets distribution platform.
Sergio P. Ermotti, CEO at UBS said: "This transaction captures a unique opportunity to combine two strong partners with complementary strengths,".
Sylvia Coutinho, UBS Country head in Brazil, added: "This endeavor is a clear demonstration of UBS's commitment to expanding our business in South America with a bank that has a strong track record partnering with financial services firms."
The deal comes as UBS shakes up its investment banking arm to boost earnings and curb costs while it struggles with muted global equity, debt and M&A activity.
Commenting on the alliance, Banco do Brasil CEO Rubem Novaes said: "This partnership is in line with our strategy of improving the return for our shareholders and providing sophisticated products to our clients."
UBS added that the investment bank's chairperson will be appointed by Banco do Brasil, while UBS will appoint the vice chairperson and chief executive officer.