SAO PAULO: Shares in Banco Inter SA surged more than 20% on Tuesday as the Brazilian online lender raised 1.25 billion reais ($329.73 million) in an offering largely sold to Japan's SoftBank Group Corp, boosting pressure on traditional banks.
Shares in Brazil's largest lenders, such as Itau Unibanco Holding SA and Banco Bradesco SA, were down more than 1% in the morning trading, in a move some traders linked to investors migrating to Banco Inter.
"There is a fear among investors that fintechs will take on traditional banks and reduce their net interest income margins," said Guilherme Foureaux, a portfolio manager at Paineiras Investimentos. "Softbank's investment in Banco Inter is a seal of approval for fintechs. This will be a resilience test for banks."
Banco Inter will use the offering's proceeds to grow its loan book, invest in technology and acquire companies.
The addition of SoftBank, an experienced and deep-pocketed investor, to Banco Inter's shareholder list, could fuel its growth strategy. SoftBank acquired a more than 5% stake in the bank, one source with knowledge of the matter said.
Banco Inter is SoftBank's first investment in a Latin American bank, although it has bought into at least one other fintech in the region, Brazilian lending platform Creditas.
The bank, which is controlled by the Menin family, previously best known as key investors in homebuilder MRV Engenharia e Participacoes SA, has not disclosed its new shareholders after the offering.
Banco Inter welcomed the Softbank stake purchase as an opportunity to build on the Japanese investor's fintech expertise, the source with knowledge of the matter said.
Brazilian banks have hinted they are starting to feel pressure from fintechs, so far mainly in the card processing and asset management businesses.
Itau Unibanco, the country's largest private-sector lender, launched a voluntary severance program on Monday and revealed it may close up to 400 branches this year as it is slashes costs to face fiercer competition.