Santander acquires the Brazilian online brokerage Toro Investimentos

Santander will hold a 60% interest in the capital stock Toro, which will be the remaining brand in the new firm

Sao Paulo, Brazil - december 29 2019 - Logo of Santander, a Spanish multinational commercial bank and financial services company founded in 1857
Santander Brazil agency. Photo: Shutterstock
  • Toro Investimentos will join Pi Investimentos, Santander’s broker;
  • Executive Gabriel Kallas will continue as CEO, and the current CEO of Pi, José Clemenceau, will assume the role of COO.

Santander Brazil announced on Tuesday that it had acquired the online brokerage Toro Investimentos, which will join Pi Investimentos, Santander’s broker, “to form one of the best investment platforms in fixed and variable income in Brazil”, it said on a blog post. Santander will own a 60% interest in the capital stock of Toro, which will be the remaining brand in the new company.

READ ALSO: Credit Suisse agrees to buy up to 35% of the Brazilian digital broker modalmais

The acquisition is another initiative that traditional banks have been taking to be more digital and recover customers who are using startups to allocate investments and digital assets, as Itaú is XP Inc‘s main shareholder.

READ ALSO: Brazilian bank Itaú buys digital transformation startup for about $ 144.5 million

According to Santander, the transaction, subject to approval by the authorities, will involve the purchase of shares, capital increase, and contribution of Pi’s operating assets, which will also lend its colors to the new company’s logo. Executive Gabriel Kallas will continue as CEO, and the current CEO of Pi, José Clemenceau, will assume the role of COO.

READ ALSO: Santander has two new fintechs targeting loans to low-income classes in Brazil

The first Brazilian platform to set up a complete and autonomous brokerage structure, Toro was created in 2010, in Belo Horizonte, and two years ago started to act in the intermediation of securities transactions.

READ ALSO: Brazilian fintech Neon acquires the country’s oldest broker to create its own investment platform

Pi, in turn, was launched by Santander Brasil in March 2019 as an open 100% digital investment platform, with an offer that includes more than 240 fixed income products.

“We realized that Pi and Toro are two legitimate representatives of the newest generation of investment platforms. Both are catalysts for the disintermediation and democratization of products previously reserved for customers with more resources. Together, they will be protagonists of this new moment in the Brazilian market, when more and more investors are looking for alternatives to traditional fixed income products, in search of profitability, practicality, and security ”, said Alberto Monteiro, executive vice president of Wealth Management at Santander.

READ ALSO: Amid the crisis, Brazilian investment startup Warren almost doubled its team size and received BRL 120 million

In addition to adding customer portfolios, the new company will benefit from Toro’s autonomous technological infrastructure, which offers navigation and transaction facilities for retail investors. And it will also rely on the B2B performance model, developed by Pi to work with clients such as family offices, managers, and investment consultants.

The association with an institution like Santander will enable us to reach new market segments and gain scale without giving up our fundamental premises, guaranteeing the investor freedom to make his choices, simplicity to manage his resources and knowledge about the market, through our information and advisory services.

Gabriel Kallas, co-founder, and CEO of Toro Investimentos

Until August, almost 3 million individual investors were registered to trade on the Brazilian stock exchange – two years ago, there were just over 800,000 registered. Even so, the rate of participation of small investors in the market is still below the average of 5% of the population in emerging countries, and 40% in the United States.

READ ALSO: Bradesco’s Bitz acquires Brazilian fintech DinDin

According to different market analysts, the volume of assets under management in Brazil is expected to rise by around 15% per year in the period from 2020 to 2025, while the volume of resources earmarked for variable income will grow by approximately 30% per year in the same period.

Get the best insights about Latin America market in your inbox