Agibank receives US$ 7.4 billion letter of intent from Citi to boost growth and innovation

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Jul 18, 2024, 08:43 ET

The letter paves the way for Agibank's long-term strategic expansion

SAO PAULO, July 18, 2024 /PRNewswire/ -- Agibank, a bank that has been redefining the service for non-digital native Brazilians, announced today that it has received a non-binding letter of intent for funding lines and capital markets issuances that may involve an amount of up to US$ 7.4 billion (approximately R$ 40 billion) from Citi.

"This letter of intent from Citi represents another important step in Agibank's journey. It reflects the market's confidence in our ability to grow in a sustainable and innovative way. We are committed to using potential resources to expand our presence and improve the experience of our customers, especially those with low income who are often overlooked by large banks," said Glauber Correa, CEO of Agibank.

To demonstrate the solid relationship between Agibank and Citi, the parties closed on this date another capital markets transaction, a financial debenture issued by Vert-9, backed by credit contracts of payroll loans to retirees and pensioners of the Brazilian Social Security Administration (INSS). These credits are underwritten by Agibank, in the total amount of R$ 2.3 billion, with Citi as the senior debenture holder in the amount of R$ 1.6 billion.

This is the second transaction of the same nature executed between the parties and aims to further strengthen Agibank's ability to serve a rapidly expanding market. The funds will allow Agibank to rapidly increase its offer of credit and services, directly benefiting its customers. This operation will boost the bank's hybrid strategy, which combines a robust digital platform with almost a thousand physical smart hubs throughout Brazil.

In the last five years, Agibank has grown five times more than the market average, and the agreement of intent with Citi is an important step to maintain the expansion trajectory. This is the second letter received by the company in the last 60 days, with the first involving an amount of US$8 billion. These negotiations consolidate Agibank as an innovative financial institution.

"These letters are the result of our good relationship with the market, always valuing proximity to major players and the diversification of our funding sources, in order to ensure robust and consistent growth of Agibank in the timeline," commented Marcello Dubeux, Chief Financial and Investor Relations Officer at Agibank.

In the first quarter of 2024, Agibank's ROAE (Return on Average Equity) reached 42.4%, highlighting the institution's efficiency and profitability. "This letter of intent will further strengthen these indicators, providing a solid foundation for future growth," Dubeux concluded.

About Agibank

We are a bank with a unique business model in Brazil. Our focus is to serve a large part of the population that has lower income and is not digital native, which traditional and digital-only banks cannot serve. We are revolutionizing this segment with a hybrid business model, which combines a fully digital bank and a network of approximately 1,000 "smart" hubs spread throughout the Brazilian territory. We offer financial products and face-to-face and digital service customized for this customer profile, ensuring a great competitive advantage in this market, which allows us to win more and more customers, with strong and lasting relationships.

SOURCE Agibank