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Credit Suisse to Buy 35% Stake in Brazil-Based Digital Bank

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Credit Suisse agreed to buy a nearly 35% stake in Brazil-based digital bank, Banco Modal (modalmais). Both companies entered a long-term agreement. Both companies will jointly explore synergies between their investment services and products.

Created in October 2015, Banco Modal has R$10 billion in custody and is considered as the fastest-growing platform in Brazil. Modalmais provides access to more than 400 funds from around 140 different managers in a total of 700 products available to investors along with the facilities provided by a digital bank such as salary account, credit card, currency exchange, payments and greater leverage from financial assets in custody.

The deal will expand Credit Suisse’s client base to include about 1 million clients of Banco Modal in Brazil to offer its wealth management services. Also, it will give access to the latest technology of the modalmais digital platform, and all the functionalities and investment possibilities that a completely digital bank like modalmais can offer to serve its customers even better.

“This announcement underlines our strong commitment to our Brazilian clients and our growth ambitions for this priority market,” said Philipp Wehle, Credit Suisse’s CEO of International Wealth Management. “This transaction further enhances our ability to serve our clients digitally while getting access to additional client segments in a fast growing environment," he added.

Credit Suisse has been actively making efforts to strengthen its business globally. In June, the Swiss Bankbecame the latest foreign bank to take the majority stake in its China securities joint venture, raising its shareholding in Credit Suisse Founder Securities to 51% from the existing 33.3%.

Shares of Credit Suisse have lost 25.3% over the past six months compared with the industry’s decline of 34.2%.

 

 

Currently, the company sports a Zacks Rank #1 (Strong Buy).

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