Bradesco Banco pulls back from FIS
“We’ve enjoyed a successful partnership with FIS for nearly a decade, and we look forward to their continued support of our card payments business,” says Cesário Nakamura, Director of Bradesco.
FIS, the global leader in financial services technology, announced today to unwind its joint venture with Brazilian bank Banco Bradesco in order to enter into an updated and more significant long term commercial agreement.
This decision to unwind the joint venture will benefit both parties and support the long-term growth of their respective businesses. Without its structure and overhead, Banco Bradesco will achieve attractive cost savings, and FIS will benefit from its ability to compete independently in the market. FIS will continue to provide ongoing services to all non-Bradesco customers currently in the joint venture on a direct basis.
New services to be provided to Banco Bradesco under the agreement include software application licensing and management, card portfolio migration, business process outsourcing, fraud management, and professional services.
As an independent service provider, FIS will be empowered to grow its business in Brazil by not requiring any payment sales to be serviced by the joint venture. This change will provide FIS greater flexibility and a more efficient go-to-market strategy. FIS views the Latin American market as a long-term strategic region for sustained growth and will continue to make investments in the region.
“This is a significant milestone in our ongoing relationship with Banco Bradesco and marks a new stage in FIS’ presence and growth in the Brazilian marketplace,” said Marianne Brown, Global Financial Solutions Chief Operating Officer, FIS. “We look forward to continuing to provide top-quality card processing services to the bank’s more than 40 million card customers, and leveraging our local market expertise to grow our business with other Brazilian banks and companies.”
The annualized expected impact of the deconsolidation of financials from the dissolution of a JV in which FIS owned 51% and Banco Bradesco owned 49% would be to reduce FIS reported revenue by approximately $200 million. Additionally, FIS expects a one-time non-cash pre-tax charge of approximately $100 million, primarily due to the write-off of goodwill and intangibles associated with the transaction, which would reduce net earnings attributable to common stockholders. On a non-GAAP basis, the deconsolidation of financials is not expected to have an impact on organic revenue growth, adjusted EPS or free cash flow.
This development in a long term and fruitful fintech-banking could be the precursor to partnership evolutions.
FIS is a global leader in financial services technology, with a focus on retail and institutional banking, payments, asset and wealth management, risk and compliance, and outsourcing solutions. FIS serves more than 20,000 clients in over 130 countries and employs more than 52,000 people worldwide. FIS is a Fortune 500 company and is a member of Standard & Poor’s 500® Index. For more information about FIS, visit www.fisglobal.com.
Bradesco is one of Brazil’s largest banks and the biggest insurance company in Latin America. It serves 71.2 million customers, both individuals and companies, with a complete portfolio of products and services through its Retail, Wholesale, Investment Banking, Asset Management, and Insurance operations. Headquartered in Osasco, São Paulo, Brazil, it employs over 97,000 people and besides composing Bovespa Index it is also part of the Dow Jones Sustainability Index and the Bovespa Sustainability Index. For more information about Bradesco please visit www.bradescori.com.br.