BTG Pactual sees expansion in Mexico as Brazil fortunes sag

BTG Pactual, Latin America's largest independent investment bank, plans to expand into fixed income and the energy sector in Mexico as it seeks to grow in the region's No. 2 economy, the unit's new chairman said on Monday.

Guillermo Ortiz, 67, who was appointed chairman of BTG's Mexico unit last week and starts from 2016, has big plans for the São Paulo-based investment bank as it increasingly looks outside the troubled market of Brazil for growth.

BTG launched its Mexico operations in 2013 and expanded into brokerage services, asset management and private banking. Still, the unit has just 40 employees and does not register in BTG's global profits, which totaled about US$291 million in the second quarter.

"The challenge here is to grow the business to a size which is commensurate with that of the country," said Ortiz of BTG's Mexico operation, which he said is already profitable under CEO Javier Artigas.

He said Mexico is part of BTG's global strategy to become "a global bank and competing with all the major investment banks in the world." BTG's non-Brazil operations already account for most of its income and staff after the acquisition of Swiss private banking firm BSI Group.

Ortiz was governor of Mexico's central bank until the end of 2009, chairman of Banorte, Mexico's fourth-largest bank, and will remain an adviser at Banorte until the end of the year. He said he recently worked on projects for state-owned oil company Pemex and national power company CFE and sees further opportunities in the energy sector.

Mexico passed landmark energy reform last year that opened up state energy monopolies to outside investment in the hope of kick-starting lagging growth.

Ortiz also pointed to the potential in the country's recently launched energy infrastructure investment vehicle, known as "Fibra E," which allow companies to issue securities backed by infrastructure assets.

"The new sector for BTG in Mexico would be the energy sector; this is wide open," Ortiz said, adding that Pemex in particular needs to sell assets to deal with its large debt burden.