Banco do Brics announces 3 new partners in its global expansion | Finance

NS Values Found that negotiations must be concluded this year to join another partner. The number of new members is expected to range from three to four each year, reaching a total of 20 members in the coming years.

“The expansion of NBD’s corporate structure is in line with the bank’s strategy of positioning itself as a reference institution for the development of emerging economies,” the bank said in a statement.

The percentage of new partners in the bank’s capital will depend on the following rounds of expansion. However, what is certain is that even with long-term dilution, the founding countries – Brazil, Russia, India, China and South Africa – will have 55% of the control of the Shanghai-based (China) bank which is currently headed by Brazilian Marcos Trujillo.

“The new partners will have an important platform at the National Development Bank to promote cooperation in infrastructure and sustainable development,” Trujillo said. “We will continue to increase the number of partners in a gradual and balanced manner.”

Uruguay, the United Arab Emirates and Bangladesh represent an interesting combination, with good ratings and good economic prospects, which helps Banco do Brics.

The UAE is currently one of the major liquidity centers in the world. And it can become a more important source of private capital for infrastructure investments, helping to create investment projects for the bank with various institutions of other partners.

Adia Fund (Abu Dhabi Investment Authority), for example, has assets of $650 billion. The Investment Corporation of Dubai (ICD) is worth $302 billion. The Mudaraba Fund, which is one of the most active offshore funds, has a total of $232 billion. The Emirates Investment Authority (EIA) has assets of $68 billion.

For Obaid Humaid Al Tayer, Minister of Financial Affairs of the United Arab Emirates, joining the National Bank of Dubai “represents a new step towards expanding the role of the UAE in the global scenario, especially in light of the country’s vast capabilities and experience in supporting infrastructure and sustainable development projects. This important step would not have been achieved without the vision and guidance of the UAE leadership, which believes in the importance of supporting development projects around the world, especially in emerging economies.”

As for Bangladesh, the appreciation is that much of the world has yet to realize its potential. It is the fastest growing country in the fastest growing continent, which is Asia. It was one of the fastest growing economies in the last decade, and is expected to grow by 8% annually over the next decade, which would mean a doubling of income in this period. Its per capita income ($1,968 in 2020) is higher than that of Pakistan ($1,193) and India ($1,900), and its neighbours, and 98% of children have completed basic education.

“Bangladesh’s accession to the National Bank of Dubai has paved the way for a new partnership at an important moment in the celebration of the fiftieth anniversary of our independence,” said Mustafa Kemal, the country’s finance minister.

Uruguay has a good risk rating, which helps Banco do the BRICS. This year, rating agency Moody’s affirmed the country’s rating at BAA2, with a stable outlook. According to the agency, the perspective reflects “prudent financial management during the pandemic”, which has curbed the increase in debt levels and will lead to stable transactions in the coming years in the country. The country has a higher per capita income than Chile. Its participation in the Bank will also allow the implementation of binational projects with Brazil, financed by the National Bank of Dubai.

“Uruguay sees in NBD a great opportunity to cooperate with member states, and to strive for better international integration of trade and investments in the country,” said Azucina Arbelchi, the country’s Minister of Economy and Finance.

The question is why Argentina, one of the emerging countries of the Group of Twenty, does not join the BRICS bank. The list of countries with which the Bank is negotiating to be a partner is agreed in advance by the Foundation’s Board of Governors. Valor discovered that Argentina was not on the list with negotiation possibilities.

Indeed, for the institution itself, it may be even more important for Peru, Colombia and Guyana to be partners, at least for the time being. The relative size of the economy is not the only criterion. There are other points that can weigh more, such as the risk rating and sources of liquidity. Last year, Argentina’s rating moved from “default” (SD) to CCC+ after completing its external debt restructuring.

Within six years of operation, Banco do Brics has approved about 80 projects in member countries, with an investment portfolio of US$30 billion (about R$160 billion). Areas such as transportation, water and sanitation, clean energy, digital infrastructure, social infrastructure and urban development fall within the scope of the institution.