J.P. Morgan Chase & Co. has substantially increased its ownership stake in C6 Bank, a prominent Brazilian digital bank, from 40% to 46%, solidifying its investment in the institution.
While the specific financial details of the transaction remain undisclosed, a statement issued by both J.P. Morgan and C6 Bank, as reported by Reuters on Tuesday, August 29, confirmed this development. This progression comes as a continuation of J.P. Morgan’s initial investment in C6 Bank in June 2021.
Following the original investment, C6 Bank has achieved remarkable expansion, witnessing a surge in its customer base from 8 million to an impressive 25 million, as detailed in the report. The bank has also diversified its offerings by introducing innovative products such as auto loans.
A significant augmentation in C6’s credit portfolio has been observed, with the value escalating from 9.5 billion reais ($1.95 billion) to an impressive 40 billion reais ($8.24 billion).
However, C6 Bank faced a setback as it recorded a loss of 2.2 billion reais ($453 million) in the previous year. This loss was primarily attributed to elevated provisions for credit losses, as highlighted in the report.
As a point of reference, C6 Bank had achieved a valuation of 11.3 billion reais in December 2020 (equivalent to around $2.28 billion), six months before the initial partnership with J.P. Morgan. During that period, the bank secured funding from private investors to support its operations.
Sanoke Viswanathan, the CEO of International Consumer Banking at J.P. Morgan, conveyed in a press release issued by C6Bank and translated from Portuguese using Google, “Our strategic investment in C6 Bank is a pivotal component of J.P. Morgan Chase’s global digital banking strategy.
The rapid advancement in terms of clientele, products, and financial strength underscores the success of C6 Bank’s approach. We are pleased to underscore our commitment to this partnership.”
Echoing this sentiment, Marcelo Kalim, the CEO of C6 Bank, expressed in the same release, “Following two years of collaborative efforts, we have jointly opted to expand this affiliation. The two banks have already demonstrated their synergy in developing novel products. Our collaboration will continue to intensify as we strive to deliver advantages to our valued customers.”
In its initial investment in June 2021, J.P. Morgan recognized the vast potential of the Brazilian market, particularly in light of the nation’s evolving regulatory landscape and modernization initiatives that had driven substantial digital adoption.
Furthermore, in a recent development, it was disclosed that C6 Bank is preparing to inaugurate its inaugural physical branches. This strategic move aims to appeal to a more affluent demographic within the market.