Capital Markets, Financial

BGC Partners eyes new platform to trade US Treasuries

BGC Partners plans to launch a new platform to trade US Treasuries early next year, in a bid to return to a market in the middle of evolution, according to people familiar with the plans.  The company, spun out of Howard Lutnick’s Cantor Fitzgerald in 2004, sold eSpeed, the second-largest interdealer platform for trading Treasuries, […]

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Sales in Rocket Internet’s portfolio companies rise 30%

Revenues at Rocket Internet rose strongly at its portfolio companies in the first nine months of the year as the German tech group said it was making strides on the “path towards profitability”. Sales at its main companies increased 30.6 per cent to €1.58bn while losses narrowed. Rocket said the adjusted margin for earnings before […]

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Renminbi strengthens further despite gains by dollar

The renminbi on track for a fourth day of firming against the dollar on Wednesday after China’s central bank once again pushed the currency’s trading band (marginally) stronger. The onshore exchange rate (CNY) for the reniminbi was 0.28 per cent stronger at Rmb6.8855 in afternoon trade, bringing it 0.53 per cent firmer since it last […]

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Nomura rounds up markets’ biggest misses in 2016

Forecasting markets a year in advance is never easy, but with “year-ahead investment themes” season well underway, Nomura has provided a handy reminder of quite how difficult it is, with an overview of markets’ biggest hits and misses (OK, mostly misses) from the start of 2016. The biggest miss among analysts, according to Nomura’s Sam […]

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Spanish construction rebuilds after market collapse

Property developer Olivier Crambade founded Therus Invest in Madrid in 2004 to build offices and retail space. For five years business went quite well, and Therus developed and sold more than €300m of properties. Then Spain’s economy imploded, taking property with it, and Mr Crambade spent six years tending to Dhamma Energy, a solar energy […]

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Categorized | Banks

Banco do Brasil to cut jobs and close branches

Posted on November 21, 2016

Banco do Brasil, Latin America’s largest bank by assets, is seeking to cut thousands of staff and shut hundreds of branches as the country’s recession bites into profits. 

In a move that Brazil’s bank employee union described as an “attack on public banks”, the state-run institution said it would offer voluntary early retirement packages to up to 18,000 employees, or nearly 17 per cent of the workforce, and close 402 branches or about 7.4 per cent of its total while downsizing a further 379. 

“Altogether, this set of announcements may boost long-term [profit] estimates by up to 17 per cent,” Credit Suisse said in a note. Banco do Brasil’s share price rose 6.13 per cent to R$27.88 ($8.33). 

The move to restructure Banco do Brasil comes as the new pro-business government of President Michel Temer is seeking to increase the efficiency of the country’s lumbering state enterprises. 

The previous leftist government of Dilma Rousseff tried to use the state-owned banks to expand lending and counter a deepening economic recession, leading to an increase in provisions for non-performing loans. 

Gilberto Occhi, the chief executive of Caixa Econômica Federal, another of the country’s largest state-owned banks, told reporters on Monday he would next week select advisers for a proposed initial public offering of the institution’s insurance arm, Caixa Seguridade Participações.

In its announcement, Banco do Brasil said the changes to the branch network would save R$750m a year in administrative expenses. 

It did not disclose the possible savings from the redundancies but Credit Suisse estimated this would result in economies of R$2.817bn a year if 80 per cent of eligible employees joined the programme, reducing personnel expenses by 13.2 per cent. 

“The R$750m savings from the corporate reorganisation coupled with the R$2.817bn from the voluntary dismissal plan amount to 23.7 per cent of our 2017 pre-tax profit estimate,” said Credit Suisse. 

The plan is likely to meet tough resistance from Brazil’s bank unions, however. 

They are known for their militancy, shutting down the sector every year for weeks with strikes for higher wages. 

“This was all done without any negotiation or even the acknowledgment of the union movement,” said the São Paulo branch of the bank and financial sector workers’ union. 

The union said the restructuring would make life tough for regions were Banco do Brasil was the only bank in town. 

But Banco do Brasil said it would ensure all municipalities continued to be served and would avoid falls in service levels by directing more customers to internet banking.