Brazil’s Bradesco eyes more partnerships to grow agri lending after Deere deal
Brazilian bank Bradesco BBDC3.SA wants to form new partnerships with banks, equipment producers and agriculture cooperatives to expand lending to the agribusiness sector, which currently covers less than 15% of its total credit portfolio.
Last Friday, Bradesco – one of Brazil’s largest private lenders – announced it was acquiring a 50% stake in Banco John Deere Brasil, an arm of Deere & Co DE.N, through a capital increase.
The deal, which is pending regulatory approvals, did not imply exclusivity, according to Bradesco’s agribusiness director, and may be followed by other agreements, both with local and international businesses.
“This is a very relevant sector and we will continue to look for other transactions,” Roberto França told Reuters.
The partnership with John Deere, and others that may come, will help Bradesco expand its footprint in agribusiness by increasing loans as well as the sale of other services, including insurance products, to the enlarged customer base, according to the executive.
Currently, Bradesco’s total lending to the agribusiness sector is about 120 billion reais ($22 billion), or 13% of the bank’s credit portfolio of about 912 billion reais.
While the bank has not set specific targets, França sees room for a substantial increase in lending, considering that agribusiness makes up for close to one third of Brazil’s gross domestic product.
Bradesco said last Friday that the investment in John Deere would not negatively impact its capitalization ratio.
The bank, however, did not disclose the transaction value.
Reporting by Luciana Magalhaes; Editing by David Holmes via Reuters