The Inter-American Development Bank (IDB) today announced the approval of an A/B loan of approximately US$100 million for Banco Industrial e Comercial S. A. (BICBANCO) in Brazil.
Originally constituted as a credit cooperative in 1938, it became a bank in 1944, and acquired its current name of Banco Industrial e Comercial S.A. (BICBANCO) in 1981. It is currently the leading bank in the midsize market with 69 years of experience and a focus in the middle market segment. Its sector expertise, proximity to its clients and efficiency in credit concession have propelled a continuous growth of the loan portfolio.
As of December 31, 2006, BICBANCO reported US$3.4 billion in total assets, ranking as Brazil’s 23rd largest bank.
The project will contribute to improve BICBANCO’s funding composition while supporting the business growth required to meet the expected demand from individuals, middle-market corporations and SMEs for their core products, therefore allowing the bank to be in a more competitive position.
According to IDB project team leader, Daniela Carrera Marquis, Brazil’s middle-market banks are key to improve banking penetration rate to the small and middle cap segments.
“This credit segment is still underserved and middle-market banks face funding challenges especially when compared to large retail banks,” said Carrera Marquis. “There is strong demand for credit with companies having relatively low indebtness levels and primarily dependant on bank loans. At the same time banks have relatively weaker funding structures with limited retail structures.”
The loan will allow BICBANCO to increase the tenor of its loan portfolio and supports its efforts to diversify funding sources to promote the growth in business required to satisfy the expected demand for corporate loans and other core products. Ultimately, the project would contribute to the development of a more competitive middle-market segment in Brazil.