A Detailed Explanation Of The Consigned Credit Market Of BMG As Viewed By Ricardo Guimaraes

Ricardo Guimaraes has a huge experience within the Brazilian financial sector. He began working for the bank in 1980. Over the years, he rose through the ranks to becoming its president and chief executive officer in 2004. He served as the financial executive officer before serving as the vice president and chief executive officer for the bank’s board of chief executive officers. His long career within the BMG bank puts him in a unique position in terms of understanding the bank’s operations and objectives of the bank in both the long term and short term.
Recently, Ricardo Guimaraes elaborated much on BMG bank’s strategy when it comes to consigned credit. He explained and gave reasons to why BMG bank is performing well with its consigned credit. According to him, the growth of BMG bank has been due to the expansion of the economy in Brazil and the vast Brazilian population. He also points out on the rise in the exploratory percentage to 47% in relation to the GDP. This amount stood at 22% in 2004. The consigned credit market of BMG Bank was worth $6 billion. This translates to a 22% share of the personal credit in relation to the entire credit market.
There has been continuous improvement in the consigned credit market of BMG bank. For instance, by 2010, BMG bank had a $14.5 billion worth of consigned credit business. In 2004, the business was worth $2.4 billion. Additionally, in 2010, the entire consigned credit market in Brazil was worth $85 billion. Within the banking system, this figure accounts for 60% in terms of personal credit indicating a significant growth in the consigned credit market. The bank has also had a yearly return on equity of 25% since 2004. For BMG bank, the growth can be attributed to the hard work as well as commitment from the competent and qualified staff of BMG bank.
Ricardo Guimaraes notes that there is room for expansion on the consigned credit market because only 50% has been exploited. As much as BMG bank competes with nearly 60 banks in the credit market, it stills serves as the market leader within the country because of its cheap rates. BMG runs the largest distribution network in Brazil that consists of 50,000 agents in addition to 3,000 selling points available in every municipality. This network enables BMG bank to serve its 5 million customers effectively.

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