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Value Chain Definition

Industry Research Report on the Banking in Brazil

The Brazilian banking industry is a complex and dynamic sector, characterized by a significant presence of large traditional banks, a rapidly growing landscape of digital banks and fintechs, and the crucial role of state-owned development banks. The industry's value chain involves a series of interconnected activities, from attracting funding to providing a wide array of financial products and services to various customer segments. This report provides a detailed analysis of the Brazilian banking value chain, its key segments, players, activities, volumes, sizes, products, services, business models, and current bottlenecks and challenges.

Value Chain Outline

The value chain of the banking industry in Brazil can be broadly segmented into core functions that directly create and deliver financial value, and support activities that enable these core functions.

Core Functions:

  • Fundraising/Captation: This initial step involves attracting financial resources from various sources to fund the bank's operations, particularly lending and investment activities.
  • Financial Intermediation/Lending: The core banking activity of transforming attracted funds into loans and other forms of credit for individuals, businesses, and the government.
  • Transaction Processing & Payments: The facilitation of financial transactions and the operation of payment systems that allow for the transfer of funds between parties.
  • Investment Banking & Capital Markets: Activities related to raising capital for corporations and governments, as well as trading securities in the financial markets.
  • Asset Management & Wealth Management: The professional management of financial assets and the provision of financial planning and advisory services for individuals and institutions.
  • Other Financial Services: This includes the offering of complementary financial products such as insurance (bancassurance), private pension plans, and consortiums.

Support Activities: These activities are essential for the smooth and efficient operation of the core functions:

  • Technology & IT Management: Development, maintenance, and security of banking systems and digital platforms.
  • Human Resources: Recruitment, training, and management of personnel.
  • Legal & Compliance: Ensuring adherence to laws, regulations, and ethical standards, including anti-money laundering (AML) and combating the financing of terrorism (CFT) (PLD-FTP).
  • Risk Management: Identifying, assessing, and mitigating various risks including credit, market, operational, and liquidity risks.
  • Finance & Accounting: Financial planning, reporting, and management.
  • Marketing & Sales: Promoting products and services and acquiring customers.
  • Physical & Digital Infrastructure: Managing physical branches, ATMs, data centers, and digital channels.

Identification and description of each step in the value chain

1. Fundraising/Captation: This step is the foundation of banking, where institutions gather the necessary capital to conduct their operations. It involves attracting funds from individuals and entities through various deposit products and accessing capital markets for wholesale funding.

  • Identification and description of segments:
    • Retail Deposits: Focuses on individual customers and small businesses, offering products like checking accounts (conta corrente), savings accounts (conta poupança), and time deposits (CDBs - Certificados de Depósito Bancário). Main activities include account opening, deposit taking, managing account services, and providing customer support related to deposits.
    • Wholesale Funding: Involves raising larger sums of money from corporations, financial institutions, and through the issuance of debt instruments in the capital markets. Activities include issuing debentures, financial bills (LFs), repurchase agreements, and accessing interbank markets.
  • List of types of players in each segment:
    • Retail Deposits: Traditional Banks, Digital Banks, Credit Unions, Payment Institutions (offering payment accounts).
    • Wholesale Funding: Traditional Banks, Investment Banks, Development Banks.
  • Detailed description of the main activities within each segment:
    • Retail Deposits: Activities range from initial customer onboarding and identity verification to managing daily transactions (deposits, withdrawals, transfers), providing online and mobile banking access, offering financial education regarding savings and deposit products, and handling customer inquiries and issues.
    • Wholesale Funding: This involves structuring and issuing various debt instruments (such as debentures, LCIs, LCAs, and financial bills) to institutional investors and accessing interbank lending markets. It requires strong relationships with institutional clients and a deep understanding of capital markets.

  • List examples of key players with detailed profiles:

    • Itaú Unibanco: Brazil's largest private bank, with a strong presence in retail and wholesale funding through its extensive branch network and digital channels. Offers a wide range of deposit and investment products.
    • Banco do Brasil: A large state-owned bank with a vast network, significant in attracting retail and corporate deposits. Also active in issuing debt.
    • Caixa Econômica Federal: A major state-owned bank with a strong focus on retail banking, particularly savings accounts (Poupança), playing a key role in attracting individual deposits.
    • Nubank: A leading digital bank that primarily attracts funding through digital savings and checking accounts, known for its user-friendly interface and no-fee structure.
    • BTG Pactual: While primarily an investment bank, it also has a growing digital retail platform (BTG Pactual Digital) that attracts deposits and investments from individuals, complementing its strong wholesale funding capabilities in the capital markets.

  • Show estimates of volumes and sizes of each step in the value chain:

    • Retail Deposits/Investments (Individuals): The volume invested by individuals in Brazil reached R$ 7.3 trillion by the end of 2024, a 12.6% increase from 2023. This includes retail traditional, high-income retail, and private banking segments.
    • Banking Captation Instruments: The volume of new issuances of banking captation instruments grew by 10.9% in Q4 2024 compared to Q4 2023, primarily driven by CDBs (76.7% of issuances), RDBs (16.9% growth), and LCAs (14.2% growth). The average stock of banking captation instruments grew by 25.3% in Q4 2024.
    • Poupança: The total balance of savings accounts (Poupança) was R$ 971.8 billion at the end of 2024, a 5% increase compared to 2023. In July 2024, the volume of applications totaled R$ 326.6 billion, while resgates were R$ 330.2 billion, resulting in a net withdrawal of R$ 3.6 billion for the month.

2. Financial Intermediation/Lending: This is a central function where banks utilize the funds they've attracted to provide credit in various forms, enabling economic activity.

  • Identification and description of segments:
    • Retail Credit: Providing loans and financing to individuals for personal use, housing, vehicles, and through credit cards. Activities include credit scoring, loan application processing, disbursement, and collection.
    • Corporate Credit: Offering credit facilities to businesses of all sizes for working capital, investments, trade finance, and project finance. Activities involve detailed financial analysis, structuring loan agreements, monitoring credit risk, and managing corporate client relationships.
    • Agribusiness Credit: Specialized lending for agricultural and livestock activities, often with government-backed programs. Activities include evaluating rural projects, providing financing for inputs, equipment, and infrastructure, and managing specific risks related to agriculture.
    • Structured Finance: Development of complex financial packages, often involving securitization and multiple funding sources, for large projects or specific asset classes.
  • List of types of players in each segment:
    • Retail Credit: Traditional Banks, Digital Banks, Credit Unions, Fintechs (focused on personal credit, payroll loans, etc.).
    • Corporate Credit: Traditional Banks, Development Banks, Investment Banks.
    • Agribusiness Credit: Traditional Banks (especially those with a strong rural presence), Development Banks (like Banco do Brasil and Banco do Nordeste).
    • Structured Finance: Investment Banks, Large Traditional Banks.
  • Detailed description of the main activities within each segment:
    • Retail Credit: Activities include assessing individual creditworthiness (credit scoring), processing loan and credit card applications, managing loan portfolios, sending billing statements, collecting payments, and handling delinquent accounts. Digital banks excel in providing quick online credit approval processes.
    • Corporate Credit: This involves in-depth analysis of a company's financial health, business plan, and industry risks. Activities include structuring loan terms, negotiating interest rates and collateral, managing credit lines, and providing ongoing financial advice to corporate clients.
    • Agribusiness Credit: Requires specialized knowledge of agricultural cycles, market prices, and specific government programs. Activities include evaluating the viability of rural projects, providing technical assistance, and managing risks associated with climate and market fluctuations.
    • Structured Finance: Involves designing tailor-made financial solutions for complex needs, often pooling assets to create securities (securitization) that can be sold to investors. This requires expertise in financial engineering and capital markets.

  • List examples of key players with detailed profiles:

    • Itaú Unibanco: Strong presence across all credit segments, with a large retail loan portfolio, significant corporate lending operations, and activities in agribusiness credit and structured finance.
    • Banco do Brasil: Historically strong in agribusiness credit and also a major player in retail and corporate lending, including significant participation in government financing programs.
    • Bradesco: A major provider of retail and corporate credit, with a large network and diverse loan portfolio.
    • Caixa Econômica Federal: Dominant in real estate financing (mortgages) through the SBPE and FGTS systems, also a significant player in other retail credit lines.,,,
    • Nubank: Primarily focused on retail credit, offering credit cards and personal loans with a simplified digital experience.
    • Banco do Nordeste do Brasil: A key development bank focused on providing credit for regional development, particularly in agribusiness and infrastructure in Northeast Brazil.

  • Show estimates of volumes and sizes of each step in the value chain:

    • Total Credit Stock (SFN): The stock of credit in the National Financial System (SFN) reached R$ 6.5 trillion in February 2025, an increase of 0.4% in the month.
    • Credit to Individuals (SFN): R$ 4.0 trillion in February 2025, with a 0.4% monthly increase and 12.5% increase in 12 months. The credit to individuals is expected to expand by 11.9% in 2024.
    • Credit to Companies (SFN): R$ 2.5 trillion in February 2025, with a 0.5% monthly increase and 10.7% increase in 12 months. Corporate credit is projected to grow by 9.1% in 2024.
    • Amplified Credit to Non-Financial Sector: R$ 18.8 trillion (158.1% of GDP) in February 2025, a 1.7% monthly increase and 14.9% increase in 12 months.
    • Real Estate Financing (SBPE + FGTS): Expected to reach R$ 270 billion in concessions in 2024, a 7.8% increase from 2023., Financed by SBPE, volume was R$ 82.1 billion in H1 2024 (+7% YoY). Financed by FGTS, volume was R$ 67.2 billion in H1 2024 (+75% YoY). For 2025, a retraction of 15% to 20% is expected for real estate financing.

3. Transaction Processing & Payments: This step encompasses the systems and processes that enable customers to make payments and transfer funds efficiently and securely.

  • Identification and description of segments:
    • Retail Payments: Facilitating payments for everyday transactions by individuals, including card payments (credit, debit, pre-paid), Pix, bill payments (boletos), and electronic transfers (TED, DOC). Activities involve transaction authorization, clearing, settlement, and fraud prevention.
    • Corporate Payments: Managing payment flows for businesses, such as payroll processing, supplier payments, and collection of receivables.
    • FX and Cross-border Payments: Enabling the exchange of currencies and facilitating international money transfers for individuals and businesses.
  • List of types of players in each segment:
    • Retail Payments: Traditional Banks, Digital Banks, Payment Institutions, Fintechs (payment processors, digital wallets).
    • Corporate Payments: Traditional Banks, Digital Banks, Payment Institutions, Fintechs (payroll solutions, payment gateways).
    • FX and Cross-border Payments: Traditional Banks, Exchange Brokers, Fintechs specializing in international transfers.
  • Detailed description of the main activities within each segment:
    • Retail Payments: Involves maintaining the infrastructure for processing card transactions (issuing cards, operating point-of-sale terminals, clearing and settlement networks), facilitating Pix payments (key management, transaction processing), enabling online and mobile payment services, and ensuring the security of transactions.
    • Corporate Payments: Providing businesses with tools and platforms for managing large volumes of payments, integrating with accounting systems, offering automated clearing house (ACH) services, and managing corporate cards.
    • FX and Cross-border Payments: Activities include buying and selling foreign currencies, executing international wire transfers, complying with international regulations, and managing foreign exchange risk for clients.

  • List examples of key players with detailed profiles:

    • Itaú Unibanco: A major participant in all payment segments, with a large card operation, active participation in Pix, and corporate payment solutions.
    • Banco do Brasil: Significant presence in retail and corporate payments, including extensive use of Pix and various payment services for businesses.
    • Nubank: Revolutionized retail payments with its credit card and Pix integration, known for its seamless digital payment experience.
    • PagSeguro and PicPay: Prominent fintechs focused on payments, offering digital wallets, payment processing for merchants, and various payment services for individuals.,
    • Elo, Visa, Mastercard: Card schemes that are integral to the card payment ecosystem, partnering with banks and payment institutions.

  • Show estimates of volumes and sizes of each step in the value chain:

    • Total Electronic Payments (Cards): R$ 2 trillion moved in the first semester of 2024, an increase of 11.2% YoY. R$ 965 billion moved in Q1 2024 (+11.4% YoY).
    • Credit Card Transactions (Value): R$ 1.3 trillion in H1 2024 (+14.3% YoY). R$ 635.2 billion in Q1 2024 (+14.4% YoY). Expected to move between R$ 4.05 trillion and R$ 4.12 trillion in 2024 (+8.5% to 10.5% YoY). R$ 9635.2 billion moved in Q1 2024.
    • Debit Card Transactions (Value): R$ 486.2 billion in H1 2024 (-0.2% YoY). R$ 241.2 billion in Q1 2024 (-0.4% YoY).
    • Pre-paid Card Transactions (Value): R$ 181.5 billion in H1 2024 (+24.8% YoY). R$ 88.5 billion in Q1 2024 (+27.9% YoY).
    • Total Card Transactions (Volume): 22.1 billion transactions in H1 2024 (+11.3% YoY). 10.8 billion transactions in Q1 2024 (+11.3% YoY).
    • Credit Card Transactions (Volume): 9.5 billion transactions in H1 2024 (+12.4% YoY). 4.7 billion transactions in Q1 2024 (+13.3% YoY).
    • Debit Card Transactions (Volume): 8.1 billion transactions in H1 2024 (+2.8% YoY). 4 billion transactions in Q1 2024 (+2.9% YoY).
    • Pre-paid Card Transactions (Volume): 4.4 billion transactions in H1 2024 (+21.5% YoY). 2.1 billion transactions in Q1 2024 (+25.6% YoY).
    • Remote Card Purchases (Online, Apps, Digital Wallets): R$ 225.3 billion moved in Q1 2024 (+18.4% YoY).
    • Proximity Payments (NFC): Grew by 56.8% in Q1 2024 YoY.
    • Pix Volume: Moved R$ 27.3 trillion in 2024. Brazil is the second largest instant payment market globally, with 37.4 billion real-time transfers in 2023. Pix is used by 77% of citizens in Brazil. Expected to grow to 115.8 billion payments by 2028.

4. Investment Banking & Capital Markets: This area focuses on assisting corporations and governments in raising capital and facilitating the trading of securities.

  • Identification and description of segments:
    • Equity Capital Markets (ECM): Managing the issuance of stocks (shares) through IPOs (Initial Public Offerings) and follow-on offerings.
    • Debt Capital Markets (DCM): Arranging the issuance of debt securities such as bonds and debentures.
    • M&A Advisory: Providing सलाह (advice) to companies on mergers, acquisitions, and divestitures.
    • Brokerage, Sales & Trading: Facilitating the buying and selling of securities for clients and engaging in proprietary trading.
  • List of types of players in each segment:
    • ECM & DCM: Investment Banks, Large Traditional Banks with investment banking divisions.
    • M&A Advisory: Investment Banks, Specialized M&A Advisory Firms.
    • Brokerage, Sales & Trading: Brokerage Firms, Investment Banks, Large Traditional Banks.
  • Detailed description of the main activities within each segment:
    • ECM & DCM: Involves underwriting new stock or bond issues, pricing securities, marketing them to investors, and ensuring compliance with regulations.
    • M&A Advisory: Providing strategic advice on potential mergers, acquisitions, or sales of companies, valuing businesses, negotiating terms, and assisting with the transaction process.
    • Brokerage, Sales & Trading: Executing buy and sell orders for clients in stock, bond, and other markets, providing research and market analysis, and managing trading desks.

  • List examples of key players with detailed profiles:

    • BTG Pactual: The largest investment bank in Latin America, with a dominant presence across all investment banking and capital markets segments in Brazil.
    • Itaú BBA (Investment Banking arm of Itaú Unibanco): A significant player in investment banking, particularly in M&A advisory and debt capital markets.
    • Bradesco BBI (Investment Banking arm of Bradesco): Active in capital markets and M&A transactions.
    • XP Investimentos: While also strong in retail investments, XP has a growing presence in investment banking and capital markets activities.

  • Show estimates of volumes and sizes of each step in the value chain:

    • Capital Markets Total Issuances: R$ 783.4 billion in 2024, with record volumes for debentures (R$ 473.7 billion), commercial papers (R$ 43.6 billion), and CRIs (R$ 58.9 billion). The volume moved in the Brazilian capital markets reached R$ 677.3 billion by November 2024, exceeding the total for full-year 2023.
    • Debentures: R$ 473.7 billion issued in 2024. Intermediaries of offers subscribed 45.5% (R$ 215.7 billion), and funds acquired 44.3% (R$ 209.9 billion) of the total debenture volume in 2024. 25.7% of debenture volume in 2024 was for infrastructure investments, 24.5% for ordinary business management, and 23.4% for debt payment.
    • Securitized Receivables (CRI, CRA, CR, FIDC): Totaled R$ 181.5 billion in 2024. CRIs and FIDCs were mainly acquired by funds (47.4% and 50.5% respectively). CRs surpassed R$ 1 billion in offerings in 2024 for the first time. CRAs offerings were R$ 41.3 billion in 2024. FIDCs reached R$ 81.4 billion in captation in 2024.

5. Asset Management & Wealth Management: This step focuses on managing financial assets on behalf of clients and providing personalized financial advisory services.

  • Identification and description of segments:
    • Retail Investment Funds: Managing pooled investment vehicles for individual investors with varying risk profiles.
    • Private Banking/Wealth Management: Providing tailored financial services, including investment management, financial planning, and других услуг (other services), to high net worth individuals (HNWIs).
    • Institutional Asset Management: Managing investments for large institutions such as pension funds, insurance companies, and endowments.
  • List of types of players in each segment:
    • Retail Investment Funds: Asset Management Firms, Banks (through their asset management divisions).
    • Private Banking/Wealth Management: Private Banking divisions of large banks, Specialized Wealth Management Firms.
    • Institutional Asset Management: Asset Management Firms, Banks (through their asset management divisions).
  • Detailed description of the main activities within each segment:
    • Retail Investment Funds: Involves creating and managing diverse investment funds (e.g., fixed income, equities, multimercado), determining investment strategies, managing portfolio risk, and distributing fund shares to retail investors.
    • Private Banking/Wealth Management: Providing personalized investment advice, creating customized investment portfolios based on client goals and risk tolerance, offering tax and estate planning, and providing a concierge level of service.
    • Institutional Asset Management: Managing large investment portfolios according to the specific mandates and objectives of institutional clients, including pension obligations, insurance reserves, and endowment goals. This often involves complex strategies and reporting.

  • List examples of key players with detailed profiles:

    • Itaú Asset Management: A leading asset manager in Brazil, offering a wide range of funds for retail and institutional clients, and a strong private banking operation.
    • BB Gestão de Ativos DTVM (part of Banco do Brasil): A major asset manager with a large volume of assets under management, serving retail and institutional clients, including government-related entities.
    • Bradesco Asset Management (BRAM): Another significant player in the asset management industry, offering various investment solutions.
    • BTG Pactual Asset Management and Wealth Management: Strong presence in asset and wealth management, particularly serving high-net-worth individuals and institutional investors.
    • XP Investimentos: While a brokerage, it has significantly expanded its asset management and wealth management services, becoming a major player in attracting retail and high-income investors.

  • Show estimates of volumes and sizes of each step in the value chain:

    • Total Investments by Individuals: R$ 7.3 trillion at the end of 2024. R$ 6.8 trillion in Q1 2024. R$ 7.22 trillion at the end of September 2024.
    • Investments by Segment (End 2024): Retail High Income: R$ 2.57 trillion (+15.4% YoY). Retail Traditional: R$ 2.43 trillion (+13.6% YoY). Private Banking: R$ 2.30 trillion (+8.7% YoY).
    • Investments by Instrument (End 2024): Fixed Income: R$ 4.32 trillion (+18% YoY). Private Pension: R$ 1.23 trillion (+18.3% YoY). Variable Income: R$ 992.2 billion (+1.3% YoY). Hybrids (multimercado, etc.): R$ 744 billion (-5.8% YoY).
    • Investments by Instrument (End 2024) (Details): Securities: R$ 3.35 trillion (+15.5% YoY). Funds: R$ 1.73 trillion (+8.2% YoY). Poupança: R$ 971.8 billion (+5% YoY). CDBs: R$ 1.04 trillion (+20.7% YoY). Tax-exempt securities: R$ 1.24 trillion (+15.5% YoY). Traditional debentures: R$ 47.6 billion (+35.4% YoY). Public securities: R$ 181.9 billion (+21.3% YoY). Shares: R$ 732.1 billion (+4.1% YoY).
    • Assets Under Management (Total Industry): R$ 9.2 trillion as of September 2024.
    • Incentivized Debenture Funds: Total under management reached R$ 207 billion in 2024, tripling in size (+214%). Expected to surpass R$ 300 billion in 2025.

6. Other Financial Services: This includes offering additional financial products, often integrated with banking services.

  • Identification and description of segments:
    • Insurance (Bancassurance): Selling insurance products (life, property, casualty, auto) through banking channels.
    • Private Pension Funds: Offering retirement savings plans.
    • Consortiums: Administering groups for the purchase of goods or services through communal savings and periodic抽選 (drawings).
    • Foreign Exchange (Retail): Services for individuals needing to exchange currency for travel or international transfers.
  • List of types of players in each segment:
    • Insurance (Bancassurance): Insurance Companies (often subsidiaries or partners of banks), Banks.
    • Private Pension Funds: Pension Fund Managers (often related to banks or insurance companies).
    • Consortiums: Consortium Administrators (many affiliated with banks or manufacturers).
    • Foreign Exchange (Retail): Banks, Exchange Brokers.
  • Detailed description of the main activities within each segment:
    • Insurance (Bancassurance): Marketing and selling insurance policies to the bank's customer base, collecting premiums, and assisting with claims processing. This leverages the bank's existing customer relationships and distribution network.
    • Private Pension Funds: Designing and managing private pension plans, attracting contributions from individuals and companies, investing the funds, and managing benefit payouts during retirement.
    • Consortiums: Forming and managing groups of individuals or entities with similar purchasing goals, collecting regular contributions, conducting drawings or auctions to distribute the pooled funds or assets, and managing the group's finances.
    • Foreign Exchange (Retail): Buying and selling foreign banknotes and travel cards, processing international money transfers, and providing advice on exchange rates and regulations for individual customers.

  • List examples of key players with detailed profiles:

    • BB Seguridade (part of Banco do Brasil): A leading player in the bancassurance market in Brazil, distributing insurance, pension, and capitalization products through Banco do Brasil's channels.
    • Bradesco Seguros (part of Bradesco): Another major insurance group affiliated with a large bank, active in various insurance lines and pension plans.
    • Caixa Seguridade (part of Caixa Econômica Federal): Sells insurance and related products through Caixa's extensive network.
    • Itaú Seguros (part of Itaú Unibanco): Offers insurance solutions to the bank's customer base.

  • Show estimates of volumes and sizes of each step in the value chain:

    • Insurance Market: The insurance market in Brazil is attractive with a consistent CAGR of around 10% per year in the last decade and an average ROE of 15% in the last five years. Bancassurance represents up to 50% of life insurance distribution in Brazil.
    • BB Seguridade: Reported a profit of R$ 4.2 billion in the first semester of 2024.,

7. Support Activities: These activities are crucial for the overall functioning and sustainability of banking operations.

  • Detailed description of the main activities within each segment:
    • Technology & IT Management: Developing and maintaining core banking systems, online and mobile banking platforms, data analytics infrastructure, cybersecurity measures, and supporting the implementation of new technologies like Open Finance, Pix, and potentially DREX.,,,
    • Human Resources: Recruiting, training, and developing banking professionals, managing compensation and benefits, overseeing labor relations, and fostering a corporate culture.
    • Legal & Compliance: Ensuring the bank complies with all relevant laws and regulations, including those related to financial stability, consumer protection, anti-money laundering (PLD-FTP), data privacy (LGPD), and the new regulatory frameworks for Open Finance, Pix, and fintechs.,,, Activities include developing internal policies, monitoring transactions for suspicious activity, reporting to regulatory bodies, and handling legal disputes.
    • Risk Management: Identifying, measuring, monitoring, and controlling various types of risks, including credit risk (default by borrowers), market risk (losses from market fluctuations), operational risk (failures in internal processes or systems), and liquidity risk (inability to meet obligations). This involves sophisticated modeling, stress testing, and setting risk limits.
    • Finance & Accounting: Managing the bank's financial resources, including budgeting, financial reporting, tax planning, and investor relations.
    • Marketing & Sales: Developing marketing campaigns, managing brand image, acquiring new customers, cross-selling products and services, and managing customer relationships.
    • Physical & Digital Infrastructure: Maintaining bank branches, ATMs, data centers, communication networks, and ensuring the reliability and security of digital channels.

Value Chain Summary Table

Feature Fundraising/Captation Financial Intermediation/Lending Transaction Processing & Payments Investment Banking & Capital Markets Asset Management & Wealth Management Other Financial Services (e.g., Insurance) Support Activities
Main Activities Attracting deposits, issuing debt Providing loans, credit analysis, risk mgmt Processing transactions, managing payments Underwriting, M&A advisory, trading Portfolio management, financial planning Product development, sales, claims IT, HR, Legal, Compliance, Risk Mgmt, Finance, Mktg
Segments Retail Deposits, Wholesale Funding Retail, Corporate, Agribusiness, Structured Retail, Corporate, FX ECM, DCM, M&A, Brokerage Retail Funds, Private, Institutional Insurance, Pension, Consortiums, FX Retail Internal Functions, External Providers
Types of Players Traditional Banks, Digital Banks, Fintechs, Credit Unions Traditional Banks, Digital Banks, Development Banks, Fintechs, Credit Unions Banks, Digital Banks, Payment Inst., Fintechs Investment Banks, Large Banks, Brokerages Asset Managers, Banks, Wealth Managers Insurers (Bank-owned/Partners), Pension Mgrs, Consortium Adm. Internal Depts, Tech Firms, Consultants, Law Firms
Examples of Players Itaú, BB, Caixa, Nubank, BTG Itaú, BB, Bradesco, Caixa, Nubank, BNB Itaú, BB, Nubank, PagSeguro, PicPay, Elo BTG Pactual, Itaú BBA, Bradesco BBI, XP Itaú Asset, BB Gestão, BRAM, BTG, XP BB Seguridade, Bradesco Seguros, Caixa Seguridade, Itaú Seguros All banks have internal support; various external vendors
Volumes/Sizes (2024) Individuals' Invest: R$ 7.3T; Banking Captation Issuances: +10.9% (Q4); Poupança: R$ 971.8B Total Credit SFN: R$ 6.5T (Feb 25); Retail Credit: R$ 4.0T (Feb 25); Corp Credit: R$ 2.5T (Feb 25); Real Estate Fin: R$ 270B (proj) Electronic Payments: R$ 2T (H1); Credit Card Value: R$ 4.05-4.12T (proj); Pix: R$ 27.3T Capital Mkts Issuances: R$ 783.4B; Debentures: R$ 473.7B Individuals' Invest: R$ 7.3T; AuM: R$ 9.2T; Incent. Deb. Funds: R$ 207B BB Seguridade Profit (H1): R$ 4.2B Bank IT Spend (2025 proj): R$ 47.8B (+13% YoY)

Examples of Main Players:

Itaú Unibanco: * Profile: The largest financial conglomerate in Brazil and Latin America, operating across retail, corporate, and investment banking, as well as asset management and insurance. Known for its strong brand, extensive branch network, and increasing digital presence. * Value Chain Participation: Dominant across the value chain. Strong in fundraising through a large deposit base and capital markets access. Leading provider of retail and corporate credit. Significant in transaction processing and payments. Major player in investment banking (Itaú BBA) and asset/wealth management. Offers insurance and other services through Itaú Seguros and Itaú Personnalité (Private Banking). * Case Study Example: Itaú's strategy involves a significant investment in technology and digital channels to enhance customer experience and efficiency, particularly in retail banking and payments, while maintaining its strong position in corporate and investment banking.

Banco do Brasil: * Profile: A traditional, large, state-owned bank with a historical focus on supporting government policies and providing financial services across Brazil, including a strong presence in agribusiness., * Value Chain Participation: Key in fundraising due to its wide reach and role in receiving government deposits. A major provider of credit, especially in agribusiness and also significant in retail and corporate segments. Active in transaction processing and payments (including Pix). Has a large asset management arm (BB Gestão de Ativos) and a prominent insurance group (BB Seguridade). * Case Study Example: Banco do Brasil plays a crucial counter-cyclical role in providing credit, particularly in times of economic downturn. Its strong link to agribusiness and government programs defines a unique position in the lending value chain.

Nubank: * Profile: A leading Brazilian neobank and one of the largest digital banking platforms globally. Known for its disruptive, technology-driven approach, offering a simplified and low-cost alternative to traditional banking., * Value Chain Participation: Primarily focused on the retail segments of fundraising (digital accounts), financial intermediation (credit cards, personal loans), and transaction processing/payments (Pix, digital wallet). Has expanded into investments for individuals. * Case Study Example: Nubank's rapid growth in customer base and transaction volume demonstrates the impact of digital-first business models on the retail banking value chain, challenging traditional players with lower fees and a superior user experience.

BTG Pactual: * Profile: The largest investment bank in Latin America, specializing in investment banking, asset management, wealth management, and increasingly expanding its retail and digital banking presence. * Value Chain Participation: Dominant in the Investment Banking & Capital Markets step. Strong in Wholesale Funding. Significant and growing presence in Asset Management & Wealth Management. Expanding its participation in retail fundraising and lending through its digital platform. * Case Study Example: BTG Pactual's success is rooted in its expertise in complex financial transactions and asset management for sophisticated clients. Its recent expansion into digital retail banking shows a strategic move to diversify its funding sources and client base across the value chain.

Volumes and Sizes:

Estimates for volumes and sizes of key activities in the Brazilian banking sector in 2024 and projections for 2025:

  • Retail Banking Market Size: The Brazilian retail banking market was valued at approximately USD 197.33 billion in 2024.
  • Credit Market: The total stock of credit in the SFN was R$ 6.5 trillion in February 2025. The amplified credit to the non-financial sector reached R$ 18.8 trillion (158.1% of GDP) in February 2025. Credit is projected to grow by around 9% in 2025, following a 10.8% growth in 2024, largely driven by credit to individuals (11.9% growth projected in 2024).,
  • Payments Market (Cards): Expected to move between R$ 4.05 trillion and R$ 4.12 trillion in 2024. In the first semester of 2024, R$ 2 trillion was transacted with cards.
  • Payments Market (Pix): Moved R$ 27.3 trillion in 2024. Brazil is the second largest instant payment market globally.
  • Investment Market (Individuals): Total investments by individuals reached R$ 7.3 trillion at the end of 2024.
  • Asset Management (Total AuM): R$ 9.2 trillion under management as of September 2024.
  • Capital Markets (Total Issuances): R$ 783.4 billion issued in 2024.
  • Foreign Exchange Market: The volume of entries and exits was around US$ 1.7 trillion, with potential for significant growth.

Market shares for retail banking customers as of September 2024: Itaú Unibanco (14.8%), Bradesco (9.5%), Santander Brasil (7.1%), Caixa Econômica Federal (6.9%), Banco do Brasil (5.2%), and Nubank (20.3%). Note: These market share figures based on customer count might not directly correlate with revenue or asset share.

Current Bottlenecks and Challenges:

The Brazilian banking industry faces several significant bottlenecks and challenges in 2024 and looking into 2025:

  • Intense Competition and Evolving Business Models: The rise of digital banks and fintechs has increased competition, putting pressure on traditional banks to innovate and reduce costs.,, Traditional banks are adapting by investing in digital channels and forming partnerships with fintechs (BaaS).,
  • Regulatory Changes and Adaptation: The ongoing implementation of Open Finance, the development of DREX (Brazil's digital currency), and evolving regulations for fintechs and BaaS require significant investment and adaptation by institutions.,,,,, Compliance with new regulations, including those related to ESG and increased tax scrutiny, is a growing challenge.,
  • Technology and Cybersecurity: Rapid technological advancements necessitate continuous investment in IT infrastructure and cybersecurity measures to prevent fraud and cyberattacks, which also contributes to increased operational costs.,,
  • Economic Scenario and Credit Risk: A challenging macroeconomic environment, including potential uncertainties in growth and interest rate fluctuations, can impact credit quality and profitability., While the credit market showed growth in 2024, a potential retraction in certain segments like real estate financing is expected in 2025.
  • Customer Expectations: Customers increasingly demand more personalized, convenient, and digital banking experiences, pushing institutions to enhance their service delivery and leverage data analytics and AI.,,
  • Financial Education and Inclusion: Despite advancements, a significant portion of the population still lacks adequate financial literacy, leading to challenges like over-indebtedness and impacting the effective use of financial products. Regulations are being implemented to promote financial education.
  • High Operational Costs and Spread: Brazil still has a high banking spread, influenced by factors like operational costs, tax burden, and delinquency rates. Efforts are being made to address the causes of the high spread. Investments in technology, while improving efficiency, also contribute to higher initial costs.

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