Fintech in Brazil Vows to Prove Goldman, Morgan Stanley Wrong

Thursday, December 19, 2019

By Felipe Marques and Cristiane Lucchesi

When Joao Vitor Menin took over his family’s banking business, it was a mere sideline to his father’s empire of low-income housing. Four years later, with funding from SoftBank Group Corp., it’s grown into the clan’s largest asset and one of Latin America’s hottest fintech ventures.

Next, Menin just needs to prove analysts from the likes of Goldman Sachs and Morgan Stanley wrong about his ambitious strategy.

His online lender, Banco Inter SA, became a stock-market darling by offering digital banking and zero-fee investment products to the masses. SoftBank snapped up a roughly 15% stake this year as the business looks to transform itself into a Brazilian version of Chinese juggernaut Alipay, blending payments and commerce in a platform that Menin likes to call “a super app.” If the strategy succeeds, Banco Inter would get a few cents every time a product is sold in its online environment.

But analysts are focused on earnings metrics that have slipped dramatically behind the country’s more traditional lenders in the race to attract customers. Investors may find out next year who’s right.

Photo courtesy of Victor Camilo.

Source: Bloomberg (link opens in a new window)