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Moneycorp Expands with Brazilian Investment

August 19th, 2015 4:15 PM by Brent Ferry

Moneycorp, the UK's leading foreign exchange provider, has signed an agreement to acquire a minority stake in Novo Mundo Corretora de Câmbio, a fast-growing Brazilian foreign exchange business with a 15 year heritage in international payments and retail FX.

The investment, subject to local approvals, will be the latest step in Moneycorp's global expansion strategy, which has already seen the business establish offices in Spain, France, Ireland and the US to service increasing demand for international payments flows from these countries to and from the UK, and globally.

Establishing a foothold in Brazil will enable Moneycorp to take advantage of significant growth opportunities within the country and across South America, from corporate and private clients within buoyant property and import-export markets.

Headquartered in São Paulo, with offices in Curitiba, Rio de Janeiro and Salvador, Novo Mundo Corretora de Câmbio currently employs 75 staff. The business offers international payments, foreign exchange, bank notes and MasterCard currency card services and has seen strong and steady growth, with a 332% increase in turnover in the last five years. It will be well placed to increase its share of the Brazilian FX market with Moneycorp's involvement.

Alongside this investment, Moneycorp continues to see strong organic growth across its international payments and retail businesses. During H1 2015 the firm saw gross profit jump 20% to £60.4m, following record investment into its online capability during 2014. moneycorp's international payments and retail divisions have both seen strong revenue growth over the last six months.


Article from The Telegraph

Moneycorp buys stake in Brazilian currency trader

The first overseas investment for the British foreign exchange and payments firm is part of a wider strategy to become a dominant player in the world's currency markets

Foreign exchange firm Moneycorp has bought a stake in a Brazilian counterpart in a bid to accelerate its plan to become a global player in the currency markets.

Moneycorp has bought 45pc of Novo Mundo Corretora de Câmbio, and hopes to acquire the whole business in the coming years.

Under Brazilian law, foreign finance firms cannot acquire 100pc of a domestic business up front. Instead, they must invest in a minority stake before proving themselves to the central bank.

Moneycorp already does business in the US, france and Spain, but this marks the company's first overseas purchase. Chief executive Mark Horgan expects it will take one to two years before Moneycorp is able to acquire the entire business.

“We’ve been looking at Brazil since 2009, and sourcing a clean, well-managed Brazilian foreign exchange house is quite a difficult task – you’ve got to be careful about your own reputation,” he said.

“We’re taking a very long-term view in Brazil. It will probably double in population over the next 35 years, it is the eighth biggest economy in the world, its trade corridors are north-south with North America, and also with Asia. Its economy has soya, beef, farming and, in future, gas, so in the long-term it should have good cross-border flow dynamics.”

As much as 96pc of the foreign exchange market in Brazil is in the hands of banks, the firm believes, and Mr Horgan expects Moneycorp will be able to undercut the institutions on price and on service, with its specialised offering.

Tight controls on foreign currency transfers mean customers sending even tiny sums abroad have to report the trade to the central bank. They also have to provide the central bank with tax and identity documents, making it a costly and arduous process for firms offering the service.

Moneycorp, which has processed $18bn of currency trades over the past year and saw profits jump 20pc to £60.4m in the first half of 2015, has major plans to expand into other countries following this investment.

“We like euro-non-euro flow, so if you are in the EU but not in the Eurozone then you are probably a good target for us as the vast majority of trade goes into the Eurozone,” said Mr Horgan.

“We like Scandinavia, which has a lot of cross-euro business. Canadian-US trade is also strong. We also like Latin America, but we have not really interrogated Asia at this point, even though we know there is good Asian business to be had if we get that far.”


Purchasing a vacation home in the Orlando area and need to transfer money? Open a Moneycorp account for bank- beating exchange rates and expert guidance.
Posted in:General
Posted by Brent Ferry on August 19th, 2015 4:15 PM


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