Banco do Brasil

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Incorporated: 1808

The history of Banco do Brasil intertwines with that of Brazil itself. A Portuguese colony since 1500, Brazil was for centuries held under tight commercial restraint, forbidden any industry except for shipbuilding and sugar manufacturing. Even salt, in this coastal country, was imported from Portugal.

But restrictions were relaxed in the early part of the 19th century as Portugal faced war after ignoring Napoleon's demand that all European ports be closed to the British. With no prospect of fighting off Napoleon, Portugal's prince regent, Dom João, his family, and 15,000 subjects fled across the Atlantic Ocean to Brazil. João established a monarchy in Rio de Janeiro and improved trade relations between Brazil and Europe. He created the Banco do Brasil on October 12, 1808, before Portugal had its own bank, as the bank for the Portuguese Court. It was Portugal's principal depository for years.

The bank built schools and hospitals, investing heavily in the country well into the late 1800s. Banco do Brasil also equipped Brazil's navy in its battles for independence from Portugal in the 1820s. When Brazil became a republic in 1889, the bank was a major player in restoring stability to the country's economy. Brazil had been left in shambles after the Portuguese conflict, which caused the fall of the monarchy.

During the period of rebuilding, Banco do Brasil became the country's main bank, the government's financial agent, and both a commercial and development bank focusing on rural areas, exports, and domestic business.

In the last decades of the 19th century, there was another switch in the country's structure, when Brazil's slaves became wage earners. In 1888 Banco do Brasil signed an agreement with the government to ensure the availability of credit for agriculture. The new financing encouraged immigrant settlement in rural areas and was the beginning of an organized push to develop agriculture. The bank opened a branch in 1908 in Manaus, the heart of the Amazon region, to stimulate rubber production Financial incentives brought people from all over the world, but especially from Italy, to Brazil's rich and plentiful coffee plantations. The flood of immigrants continued past the turn of the century.

Internally, Banco do Brasil was tightening its house. The bank began giving public exams to new employees. So rigid were the tests that in 1909, ten out of the 35 candidates couldn't even complete the exam; of the remainder, only nine passed.

In 1937, the bank created its Agricultural and Industrial Credit Division (CREAI). The division provided the country with a credit program to encourage and support agricultural and industrial development. With CREAI's assistance, Companhia Siderúrgica Nacional, Brazil's first steel mill, was built in the 1940s.

CREAI was involved in almost every aspect of Brazilian agriculture, from rice, cashew nuts, and fruit to sugar cane and coffee. CREAI's agricultural activities eventually turned Banco do Brasil into one of the world's largest agricultural banks.

In 1941, Banco do Brasil laid the foundation for foreign trade support, opening a branch office in Asunci&oeacute;n, Paraguay, and then later that same year opening its export and import division.

During World War II, Banco do Brasil provided the troops' payroll as well as war reparations and money transfers to the Brazilian Expeditionary Force. To help operations, three offices were opened in Italy and mobile units were sent to the front lines. The bank also set up a special system through which soldiers could withdraw or deposit cash using passbook entries.

Banco do Brasil's foreign activities continued long after the war, and in 1953, it established a foreign trade division. But it was in 1969, with the opening of its branch in New York, that the bank really became international.

The 1960s were a time of upheaval for all Brazilian banks. In 1964, the government, with increasing inflation on its hands, faced the deficiencies of the country's financial institutions. At the time, short-term lending was the business of commercial banks, which gave them dominance over other financial institutions, Long-term financing was carried out by state institutions, but with growing inflation, these loans were no better than "donations," wrote Oswaldo R. Colin, chairman of the board for Banco do Brasil, in American Banker.

The 1964 Banking Reform Law totally restructured the banking system. New types of securities became available, special credit services were offered, and medium- and long-term investments were favored. Banks began to compete by offering increased services such as guaranteed overdraft checking rights and credit cards, and competition, especially among commercial banks, heated up.

The reform law and resolutions that followed initiated a move away from small, specialized banks toward larger institutions offering a variety of services. In 1950, for example, Brazil had 404 banks; by 1972, there were only 128. During the same period in the late 1960s and 1970s the number of branches grew from about 4,000 to 11,000.

In 1975, Banco do Brasil created a fund for scientific research backing many health and agricultural projects such as the manufacture of artificial arteries, vaccines against measles, hydroelectric turbines suited for rural areas, and better methods for extracting sugar from cane.

Supporting Brazil's business community, especially small businesses, had become a major concern for the bank by the end of the 1970s, and in 1979, the bank created a program that provided financial assistance and technical guidance to small businesses. In 1982 the bank offered a fund to increase agricultural activity, diversify crops, and foster cottage industries. Other projects included building dams, schools, health centers, and small hospitals.

Banco do Brasil entered the credit card business in 1987, signing with Visa International and announcing plans to issue one million cards that first year. Prior to Visa, the bank offered no credit card and up until the mid-1980s handled most of its business through deposits. "Brazil is the largest country in Latin America, with 140 million people, and despite its recent economic problems it has the potential to be a very big consumer credit market," James F. Partridge, Visa's chief general manager for Latin America, told American Banker at the time.

In 1988, a new finance minister, Mailson Ferreira da Nobrega, came into power and Banco do Brasil's president, Camilo Calazans, was replaced by the finance ministry's general secretary, Mario Berard. The move came on the heels of the forced resignation of Brazil's central bank president.

Looking ahead to the 1990s, Banco do Brasil intends to diversify activities, increase private sector assistance, moderate interest rates, and play a stabilizing role in Brazil's financial system.

Principal Subsidiaries

Acesita Energética S.A.; BB-Financeira S.A.; BB-Leasing S.A.; BB-Corretora de Seguros e Administradora de Bens S.A.; BB-Administradora de Cartões de Créditto S.A.

Further Reading

Banco do Brasil S.A.

Type	Sociedade Anônima
Traded as	BM&F Bovespa: BBAS3
Industry	Financial services
Founded	1808
Headquarters	Brasília, Brazil
Key people	Aldemir Bendine, (Chairman)
Products	Banking Insurance Retail banking Private Equity
Revenue	US$ 55.0 billion (2011)
Profit	US$ 6.5 billion (2011) [1]
Total assets	US$ 547.8 billion (2012)[2]
Owner(s)	Brazilian Government (73%)
Employees	118.900
Subsidiaries	Banco Votorantim Banco Patagonia EuroBank USA
Website	www.bb.com.br

Banco do Brasil Headquarters in Brasília.

Banco do Brasil S.A. (English: Bank of Brazil) is the largest Brazilian and Latin American bank by assets, and the third by market value. The bank, headquartered in Brasília, was founded in 1808 and is the oldest active bank in Brazil — and one of the oldest financial institutions in the world.

Banco do Brasil is controlled by the Brazilian government but its stock is traded at the São Paulo Stock Exchange and its management follows standard international banking practices (Basel Accords). Since 2000 it is one of the four most-profitable Brazilian banks (the others being Itaú Unibanco, Bradesco, and Santander Brasil) and holds a strong leadership position in retail banking.

Contents 1 History 2 Branding 3 Services 4 International users 5 Interest rates 6 Relationship with the government 7 Working at Banco do Brasil 8 References 9 External links

History

Banco do Brasil was founded by then prince-regent João VI of Portugal to finance the kingdom's public debt when he moved from Europe to Brazil, in 1808. It went bankrupt two times in history: one in 1821, when the regent-prince returned to Portugal taking with him the bank's assets, and the second in 1898.

From 1821 to 1964 Banco do Brasil had sometimes performed tasks that exceeded its role as a traditional commercial bank, issuing currency, having the monopoly of currency exchange transactions and serving as National Treasury holder for the government. Such tasks were gradually given to other governmental institutions, mainly with the creation of the Central Bank of Brazil in 1964 and the separation from the National Treasury in 1987.

From 1992 onwards it was restructured as a commercial bank, using its huge geographic distribution and credit assets to leverage its redesign as a "normal" bank. In the process, tens of thousands of workers were laid off.

After decades of losses financed by the public treasury, the bank became very profitable and is one of the key structures used by the government to finance public programs, like "Fome Zero" (No Hunger) and DRS (Sustainable Regional Development).

Branding

Banco do Brasil office in São Paulo .

The current logo has been in use since the sixties, when the standard colors changed from brown and yellow to blue-grey-and yellow.

Since the early eighties the bank has sponsored several sports competitions (in sports such as beach soccer, volleyball, tennis, table tennis, futsal, sailing and beach volleyball). It is the official sponsor for Robert Scheidt, Gustavo Kuerten, and the Brazilian national beach soccer, volleyball and futsal teams.

The bank also sponsors other cultural events such as plays through its organization CCBB (Centro Cultural Banco do Brasil) and amateur sport through AABB (Associação Atlética Banco do Brasil).

Supermodel Gisele Bundchen was chosen to front their first global ad campaign in 2012.^[3]

Services

Besides commercial and government services, the bank offers a large variety of services to the consumer including bill payment services (Boleto), ATM loans, and a single package that contains the account numbers for checking, multiple savings accounts, and investment account. The account holder may apply for international Mastercard and Visa debit cards which act as both a credit card on a loan account, and as a debit card on the checking account (a little different from the arrangement in many other countries, where both the debit and credit functions of a debit card act on the checking account). The list of services offered encompass many complex automatic functions from ATMs and online such as a wide variety of loans, automatic payments, Brazilian bill payments, and deposits to other Brazilian accounts. Many merchants routinely accept account-to-account transfers as payment for goods.

International users

Banco do Brasil has a few branches in the USA (New York, Miami) and other countries.^[4] These branches are intended for use by large companies and for permanent residents of Brasil who visit the other countries, but they offer regular services for residents of the countries where they are located.

Banco do Brasil has been expanding its international presence and currently has more than 44 points of service abroad, divided into branches, sub-branches, business units / offices and subsidiaries.

Offices and subsidiaries

Amsterdam Asuncion Buenos Aires Caracas Ciudad del Este Dubai

George Town Hong Kong La Paz Lima London Luanda

Mexico City Miami Montevideo New York City Panama City Rome

Seoul Shanghai Tokyo Vienna Washington Santiago

Interest rates

Interest rates on loans vary to a great extent but, being a public-owned bank that operates as a commercial venture, Banco do Brasil is not noted for having the highest, or the lowest rates either. Banco do Brasil is not the only Brazilian bank with high interest rates. The Economist "Survey of International Banking" of May 20, 2006 reports that the average Brazilian interest rate on credit cards is 222%, even though inflation is under control, expected to be 5% for 2006. Interest rates have decreased slowly, despite the Brazilian Central Bank recent policy of dropping standard interest rates (which were of 8.5% per month as of June 2009).

Relationship with the government

Traditionally the CEO is appointed by the Brazilian president but usually picked from a list of career directors. A few CEOs were taken from outside the financial industry.

Banco do Brasil has the monopoly of a number of government funding programs, like Pronaf (National Subsistence Farming Support), DRS, Fome Zero (zero hunger), PASEP, and others, and is the bank of choice for most municipal and state governments.

Working at Banco do Brasil

Being public-owned, Banco do Brasil must recruit workers through a public draft process, known as Concurso Público and work within strict norms of business. Due to the security which the public draft process provides working for Banco do Brasil is considered a desirable job in most of Brazil. This process is usually carried out separately for each region, with approved candidates being recruited to any branch in the region, in which they completed the process, within the following two years in order of classification (it can be delayed for more than two years, once in each process). Candidates must be Brazilian nationals (or legal residents and naturalised) and must be able to prove that they have completed their military service and electoral registration obligations (both military service and voter registration are mandatory for all Brazilians aged 18 to 70).

Other public-owned Brazilian banks, like Caixa Econômica Federal, Banco da Amazônia, and Banco do Nordeste do Brasil also carry out a similar process but the process carried out by Banco do Brasil is the archetypal Brazilian Concurso Público like that of all Brazilian government funded public service jobs.

References

1. ^ [1]
2. ^ Made the conversion at the end of fiscal year 2011 on 31.12.2011 with the dollar being worth US$1.00 x R$ 0.53
3. ^ Gisele Bundchen ad campaign
4. ^ Branches outside Brazil ^{in Portuguese}.

External links

Wikimedia Commons has media related to: Banco do Brasil

• Banco do Brasil website (Portuguese)
• Banco do Brasil information (English)

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