The Federal Reserve has approved the application by BTG Pactual Bancorp — the United States subsidiary of Brazil's Banco BTG Pactual — to acquire M.Y. Safra Bank, FSB, a New York savings association. The Federal Reserve's determination also addressed the Financial Holding Company elections filed by each of the applicants, including BTG Pactual Bancorp.
FINANCIAL HOLDING COMPANY ELECTIONS
Financial Holding Company status, available under the Bank Holding Company Act to institutions that meet qualifying standards for capital adequacy and management soundness, grants expanded permissions to engage in activities such as securities underwriting, merchant banking, insurance, and other financially related operations alongside conventional deposit-taking and lending. The Board determined that the elections will become effective upon consummation, provided each applicant and its depository institutions are then well capitalised and well managed.
DEAL STRUCTURE
Under the approved structure, M.Y. Safra Bank becomes a direct subsidiary of BTG Pactual Bancorp and converts into a national bank, to be renamed BTG Pactual Bank, National Association, with the applicants becoming bank holding companies.