This week, the Brazilian-based Banco BTG Pactual SA revealed its Q4 earnings from 2019. Considered as one of the most pro-crypto institutions on the continent, analysts were eager to see the bank's profits. Last year, the bank instituted multiple blockchain strategies including the launch of several STOs. Impressively, Banco BTG Pactual SA showed a net income growth of just over 42%.
As the largest standalone investment bank in Latin America, the news signifies a calling for other traditional financial firms to embrace blockchain technology moving forward. According to reports, the earnings exceeded analysts’ expectations across the board. Until now, Bank officials have kept silent on the firm's blockchain initiative's progress. Now, it's evident that the project was a huge success.
STO News Pushes Profits
This substantial growth started early last year when BTG announced plans to start hosting security token offerings (STO). Since that time, the bank hosted numerous STOs. These offerings utilized both the Ethereum and Tezos blockchain.
In total, Banco BTG Pactual SA experienced a net income surge of over 42%. Broken down into categories, the bank's recurring net income saw an increase of 61%. That equals out to around $232 million. Additionally, the bank saw a stark increase in its loan book.
Notably, Banco BTG Pactual's loan book grew by just over 11% from Q3. Executives attributed this growth to a combination of factors. Importantly, the integration of blockchain technology, in addition to a new corporate strategy fueled the growth. Much of the growth in this sector emerged after bank officials announced plans to extend loan services into other South American countries. Specifically, Chile and Colombia are on the list.
Banco BTG Pactual SA Embraces Crypto
Banco BTG Pactual SA became recognized as a pro-crypto organization in early 2019 after the firm announced it would launch the first Latin American tokenized real estate fund STO – REITBZ. The project received heavy media coverage which helped to boost BTG's positioning in the market. Importantly, the STO raised $3 million.
At that time, BTG executives decided to utilize the Ethereum blockchain to carry out the STO. While the project was successful, banking officials raised some concerns regarding the structuring of the Ethereum blockchain. Basically, bank officials wanted a way to ensure that no transactions got verified from miners located in countries under US sanctions.
Since Ethereum is a decentralized blockchain that allows anyone to mine it via the Proof-of-Work consensus algorithm, blocking miners due to their location was impossible. As such, Banco BTG Pactual SA executives announced a change over to the Tezos blockchain in July 2019. Tezos provides a more permissioned blockchain than Ethereum. Consequently, the firm allows Banco BTG Pactual to avoid any future concerns regarding transaction validations from US sanctioned countries.
Banco BTG Pactual SA – Tezos Big Plans
Almost immediately after the Tezos integration, both firms announced that they had around $1bn in existing and prospective token issuances in the pipeline. This announcement helped to drive profits even further, as investors are now bullish on the new tech integrations.
Banco BTG Pactual SA – An Industry Leader
As the top player in the Latin American crypto sector, Banco BTG now has the ability to set the pace for the entire market. As such, you can expect to see a host of other institutions seeking to integrate blockchain technology as soon as possible. For now, Banco BTG Pactual SA officials deserve a pat on the back for their forward-looking strategy and successful launch of the bank's tokenization initiative.