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JPMorgan Boosts Its Stake in Brazil’s C6 Bank

JPMorgan has announced an increase in its stake in a Brazilian digital bank called C6 Bank.

JPMorgan Boosts Its Stake in Brazil’s C6 Bank

Currently, the share of the giant of the American banking sector in a financial institution that operates within the virtual space is 46%. Previously, this indicator was at around 40%. So far, there is no information about the financial terms of the deal to increase the share of the American banking giant in the Brazilian digital lender.

JPMorgan initially acquired a stake in the virtual financial institution in June 2021. Since this initial investment by the giant of the United States banking sector, the digital lender has demonstrated an impressive result in the form of an increase in the customer base from 8 million to 25 million people. Also, in two years, the virtual financial institution has expanded its product line, adding, for example, loans for the purchase of cars. This is not the end of the list of the bank’s achievements since the initial investment. Over the past two years, the loan portfolio of the financial institution has also increased, which currently amounts to $8.24 billion, and in 2021 was equal to $1.95 billion.

However, the state of affairs of the digital bank is not a functional space in which, in a symbolic sense, only the sun shines, and the economic weather does not provide for any precipitation. In 2022, the financial institution recorded a loss of $453 million. The negative indicator is the result of the fact that the bank has increased reserves in case of potential loan losses.

In December 2020, the value of the virtual lender was about $2.28 billion. This price level was fixed six months before the initial deal with the American banking giant. At the end of 2020, the lender raised capital from private investors.

Sanoke Viswanathan, JPMorgan CEO for International consumer banking, identified investments in the Brazilian financial institution as strategic and stated that these actions are part of the program for the implementation of the global concept for the development of the digital banking sector, which is followed by the American giant of the industry. He also noted that the success of C6 Bank’s approach is confirmed by facts, including the rapid expansion of the user base, an increase in the number of products offered to customers, and the growth of the balance sheet. Separately, a representative of the American bank noted JPMorgan’s commitment to this partnership.

CEO of C6 Bank Marcelo Kalim said that after two years of cooperation with a partner from the United States, a joint decision was made to expand commercial interracial. He also stated that both financial institutions have already started creating new products. Marcelo Kalim announced an increase in the intensity of cooperation between the two banks to offer customers the most useful solutions.

JPMorgan, acquiring a stake in C6 Bank in June 2021, justified its decision on the size of the Brazilian financial market and the fact that the lender had achieved success following the results of activities related to the introduction of digital technologies into its business. Also at that time, Brazil was undergoing regulatory reform and infrastructure modernization.

In October last year, the media reported on the intention of C6 Bank to launch the first commercial operations to gain wealthier customers in the market.

As we have reported earlier, JPMorgan Starts Euro Blockchain Payments for Corporate Clients.

Serhii Mikhailov

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Serhii’s track record of study and work spans six years at the Faculty of Philology and eight years in the media, during which he has developed a deep understanding of various aspects of the industry and honed his writing skills; his areas of expertise include fintech, payments, cryptocurrency, and financial services, and he is constantly keeping a close eye on the latest developments and innovations in these fields, as he believes that they will have a significant impact on the future direction of the economy as a whole.