On Friday, Bloomberg reported that Mr. Zeca Oliveira, the Brazilian unit head of Bank of New York Mellon Corporation (BK) stated the company’s plan to hire nearly 100 people in the country. The announcement was made in an interview to the news agency. This is a part of the company’s strategy to expand its operations in Brazil.
Currently, BNY Mellon Servicos Financeiros DTVM SA, the company’s Brazilian unit, administrates funds of other managers. By the end of first half of 2011, the company expects to receive a Presidential order to operate as a commercial bank in Brazil.
Mr. Oliveira also stated that as a commercial bank, BNY Mellon will provide project finance, guarantees of deposits and interest on debt. Additionally, the company may also act as a custodian for private equity funds. The new employees will be working on interfacing with the central bank, compliance and internal audit.
According to Brazil’s capital market association, at present BNY Mellon’s Brazilian unit has about 450 employees and manages assets worth 97.2 million reais. Moreover, Brazil accounts for about 80% of the company's total business in Latin America. So, the country is of strategic importance for the company.
BNY Mellon has been in expansion mode for a quite a long time. In April, the company had announced a deal to acquire Chicago-based Talon Asset Management’s wealth management business. Furthermore, last year, the company had acquired PNC Financial Services Group Inc.’s (PNC) Global Investment Servicing business, Germany's BHF Asset Servicing GmbH and Toronto-based I3 Advisors.
The latest hiring announcement is a part of BNY Mellon’s long-term plan to expand in Brazil and provide a full global and local product set and offer a broad mix of traditional and alternative structures to the local clients. This will further boost the company’s global revenue base.
BNY Mellon currently retains a Zacks #4 Rank, which translates into a short-term Sell rating. However, considering the fundamentals, we maintain a long-term Neutral recommendation on the stock.
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