In Brazil the domestic banks are managing to convince companies that in the provision of cash management services being local is best. This year’s Euromoney cash management survey shows that the universal banking model has limited appeal. HSBC remains ranked second in Brazil (and third regionally) and Santander has improved to third from fifth – although as Santander has been focusing on presenting itself to the market as a local, Brazilian bank the gains made with Brazilian corporates are probably less about the Spanish-owned bank’s global network than its emphasis on its Brazilian presence. Citi, which is still the leading regional cash management house, remains sixth in Brazil.
“We have a fruit that only grows in Brazil called the jabuticaba and there is a myth in the market that everything in Brazil is like a jabuticaba and is peculiarly local,” says Adoniro Cestari, head of Citi’s TTS in Brazil. “We have been breaking this myth a lot over the past two years because we have been bringing global products and services to the market that hadn’t been discussed previously because of this paradigm. Of course, there is a lot of adaptation needed in terms of tax and regulatory issues – and you need a local team, I am not suggesting you could deliver cash management in Brazil without a local presence – but all this is perfectly possible. We have many global and regional products that encompass Brazilian clients in regional shared-service centres.”
However, the locals are clearly still sowing the seeds of the jabuticaba story for their own ends – be it mythical or not – and harvesting the fruits of this labour. “Brazil is quite different from other countries in Latin America,” says Sérgio Saraiva, head of global and local cash management at Bradesco. “Although we have some good initiatives to work as a region, each country has very specific infrastructure, legal, regulatory and tax structures. Lots of multinational companies are looking at new business in Brazil and I think their first approach is to try to see LatAm as a region, but Brazil is very different. We have very specific tax rules; we have specific overseas transaction controls. To operate in Brazil you need to also understand the financial system and its cultures – which are very different in the south and the north. We are able to standardize the system and processes wherever companies are in the country.”
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