The Goldman Sachs Group Inc.
) plans to expand its customer base in Brazil by 50% in 2013. The
bank's strategy is to increase corporate clients as corporate
loans, structured finance and advisory services' demand are
mounting in the country.
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Goldman aims to increase the number of companies it serves in Sao
Paulo by 100 from the existing 200, by the end of Dec 2013. Last
year, on the heels of fast-growing activities such as corporate
lending and private equity fund-related investments in Brazil,
Goldman doubled the capital to about $400 million in its
Brazilian unit. These activities are yielding higher returns than
equities and government debt.
Amid challenging market conditions, Goldman plans to expand its
client base by hiring 50 or more bankers in credit and wealth
management units by the end of 2013. With the ambition of
consolidating its foothold in the country, Goldman almost doubled
its workforce over the prior years, taking the total count to
300. In late 2009, it became a full-service bank in Brazil.
Despite the uncertainty related to taxes and exchange rates,
transparency in regulations and an improving macro environment in
Brazil will help Goldman achieve high returns.
With the gradual improvement in the global economy, Goldman
targets to expand in the emerging markets. Notably, Goldman has
acquired a license to work as a fully fledged bank in Mexico.
Moreover, the bank is growing in Colombia, where revenue
escalated by hundreds of millions over the past two years.
Goldman also aims to further expand in Latin America including
Chile and Peru, though its primary focus will remain on Brazil.
Based on well-developed agricultural, mining, manufacturing, and
service sectors, Brazil's economy overshadows other South
American countries. Also, it is gradually increasing its
penetration in world markets. After reporting robust growth in
2007 and 2008, Brazil was hit hard by the onset of the global
financial crisis in early 2009. However, the Brazilian market was
the first to show signs of recovery.
With the expectation of a potential long-term GDP growth rate and
conservative monetary policies, Brazil is a promising choice for
investments and is attracting foreign investors. Therefore, with
greater access to local knowledge and resources, the prospect of
participating in emerging markets is encouraging for the firms.
Goldman currently retains a Zacks Rank #3 (Hold). Besides
Goldman, other banks that are worth considering include,
Duff & Phelps Corporation
) with a Zacks Rank #1 (Strong Buy), along with
Knight Capital Group Inc.
) with a Zacks Rank #2 (Buy).