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JPMorgan (JPM) Signs Deal to Take 40% Stake in Brazil's C6 Bank

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JPMorgan Chase (JPM - Free Report) has entered an agreement to acquire a 40% ownership stake in Brazil’s full-service digital bank, C6 Bank. The financial terms of the deal, subject to regulatory approvals, have not been disclosed yet.

C6 Bank was launched in 2019. With more than 7 million customers on its digital platform, it offers multi-currency checking and savings accounts, debit and credit cards, travel and loyalty programs, investment and lending products, and a few other products.

The CEO of JPMorgan International Consumer, Sanoke Viswanathan, stated, “We’re excited to be partnering with one of Brazil’s fastest growing digital banks. We’ve admired C6 Bank, its management team and their strategy for some time. With an impressive platform and product suite, they are well-positioned to sustain their growth trajectory and build a strong franchise. We look forward to supporting C6 Bank in its aspiration to be a long-term winner in the Brazilian banking market.”

Marcelo Kalim, the CEO and co-founder of C6 Bank, said, “Partnering with JPMorgan Chase, a global leader in financial services and a trusted name in retail banking, is a game-changer. With their support, we will invest and scale our business in a way that continues to provide Brazilian customers with best-in-class digital banking products to help them accomplish their goals.”

Brazil, Latin America’s biggest economy, is one of the world’s largest retail banking markets. Notably, the move by JPMorgan complements its international consumer strategy.

In January 2021, the company announced plans of launching a digital retail bank (under the Chase brand) in the U.K. later this year, which is expected to offer products and features customized to meet clients’ needs delivered through an innovative mobile app.

In a step toward the same direction, the Wall Street giant recently acquired one of U.K.’s largest robo advisory firms, Nutmeg.

Now, while the latest move has helped JPMorgan make its retail debut in Brazil, it follows departures by other global banks from the region.

After failing to compete with a gigantic company like Itaú Unibanco Holding S.A. (ITUB - Free Report) , HSBC Holdings plc (HSBC - Free Report) and Citigroup (C - Free Report) exited their Brazil retail businesses in 2015 and 2016.

However, while offering expertise in corporate and investment banking, JPMorgan has had a local presence in Brazil for almost 60 years.

So far this year, shares of JPMorgan have gained 21.2% compared with 28.1% growth recorded by the industry.

 

Zacks Investment ResearchImage Source: Zacks Investment Research

 

Currently, the company carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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