Strategy and Competitive Advantages
Banco ABC Brasil aims to grow and consolidate its business through the following strategies:
- Retaining its corporate-segment focus. Banco ABC Brasil intends to retain its focus on its business with mid-sized and large companies, which now represent the largest portion of its loan portfolio. The Bank expects to continue offering sophisticated solutions that are structured and tailored to customers’ needs.
- Growing Midsized business operations. Relationships with midsize companies pose an important growth opportunity for Banco ABC Brasil business since our penetration in this segment’s customer base is still low compared with the total number of companies with this size in Brazil. We currently have a commercial footprint in more than 20 cities in the South, Southeast, Midwest, and Northeast regions of Brazil.
- Boosting participation in capital markets and mergers & acquisitions deals. Banco ABC Brasil plans to take advantage of the growing Brazilian capital market to expand its activity in the fixed-income, equity and mergers and acquisitions segments, with higher volumes of products distributed and numbers of transactions it is involved in.
- Upholding its strict criteria and conservative risk management policies. Banco ABC Brasil believes that risk management is a process aimed at creating and preserving value for the institution by ensuring that any events that may affect it are identified and continuously managed depending on its risk appetite. Therefore, it maintains specific structures for managing operational, market, credit, and liquidity risks, which report to various levels of command up to the Board of Directors. The bank also has a constant monitoring process of its capital structure and keeps an adequate level of capitalization to continue growing solidly and consistently.
- Treasury. In addition to being responsible for preserving the bank’s capital by managing any assets and liabilities mismatch, and providing technical support to other areas when structuring and pricing assets, Treasury is also active in proprietary portfolio management and energy trading, helping to optimize the bank’s result.
In order to maintain its growth and consolidate its business, Banco ABC Brasil’s principal competitive advantages are the following:
- Expertise in assessing credit risks for mid-size to large companies. Expertise in credit risk assessment is an essential factor for the Bank to be an efficient lender while with minimizing risk and ensuring profitability gains. Banco ABC Brasil’s extensive credit experience acquired from over 30 years doing business in this sector has resulted in its developing a system that enables it to lend profitably with a considerably safety margin.
- Focus on its key segments while customizing products and services. Banco ABC Brasil offers an extensive line of products for midsize to large companies thus minimizing risks for its business and building even more customer loyalty. The Bank’s activities are organized into three main areas: credit, capital markets and treasury. Our diverse product portfolio includes (i) loans in local and foreign currency; (ii) foreign trade finance; (iii) structuring capital market transactions with fixed-income (structuring receivables investment funds [locally named FIDCs] and coordinating debentures and commercial papers placements) and equity (IPOs and Follow-ons) products; (iv) syndicated loans; (v) onlending for BNDES facilities; (vi) treasury products (derivatives); and (vii) banking services. The Bank works to understand its customers and develop products and services tailored to meet their needs.
- Highly qualified senior management with agile decision making. Banco ABC Brasil executive committee members have extensive financial market experience and have been working together in the Bank’s management since 1991. In addition, the Bank has a highly qualified team who enjoy extensive autonomy to detect and exploit sectorial and cyclical opportunities. Our executive officers are also minority shareholders in order to keep their interests aligned with those of other shareholders. The Bank’s administrative structure consists of specialized committees that meet frequently to speedily and efficiently discuss and decide matter relating to operations in which it in involved, as well as business opportunities and strategies.
- Strong support from its controlling shareholder combined with good corporate governance practices. Banco ABC Brasil is a Brazilian bank controlled by the Arab Banking Corporation, one of the largest banks in the Middle East and North Africa. Arab Banking Corporation is an international bank based in Bahrain and has a presence in 18 countries itself or through subsidiaries, with operations geared to international markets. It is a publicly traded bank and its shares are traded on the Bahrain Stock Exchange (BSE). Under control of the Arab Banking Corporation, Banco ABC Brasil benefits from the your controlling company’s operational support and credit by gaining access to a greater diversity of funding sources at more competitive rates, in terms of both prices and tenure. Banco ABC Brasil is committed to high levels of corporate governance practices. It is administratively independent in relation to the controlling shareholder while reporting transactions and following guidelines of general character set by the latter. In case of change of control, minority shareholders have tag along rights to be paid 100% of the price per share to be received by the controlling shareholder. Currently, two of the five members of the board of directors are independent directors. In addition, Banco ABC Brasil has a Fiscal Council, as well as risk, audit and remuneration committees, which aims to strengthen control mechanisms and ensure more transparency for shareholders.