Brazil's C6 Bank Raises Fresh Capital To Boost Loans After Alliance With TIM Participações S.A.

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Comserve Inc.

Aug 18, 2020, 09:30 EST

Bronx, United States, Aug 18, 2020, 09:30 /Comserve / -- The Brazilian digital lender, C6 Bank has raised new capital by issuing its listed stocks to its key stakeholders which also included CEO Marcelo Kalim.

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Sao Paulo, August 14, 2020: The Brazilian digital lender, C6 Bank has raised new capital by issuing its listed stocks to its key stakeholders which also included CEO Marcelo Kalim. An amount of R$ 525 million was injected by the investors after it started a partnership with the telecommunication company TIM Participações SA last month.

The additional funds were approved by The Brazilian Central Bank on Wednesday. As a result, C6 bank will now operate with an increased capital of R$ 1.24 billion. According to Karina Rodrigues, Chief Financial Officer at C6 bank, the new funds raised will be used to develop the bank’s platform and add a new customer base while taking into account the growth prospect for the second half of the year.

C6 Bank plans to offer more loans to both individuals and SME clients. For individual customers and small businessmen, the bank already offers loans through its app with a pre-approved credit line. For SMEs, it offers credit through a network of over 400 business consultants operating all around Brazil.

In July 2020, C6 Bank announced a joint financial and telecom services offer to leverage synergies in sales and payment channels through a strategic alliance with TIM. Following this announcement, in the same month, C6 Bank surpassed the 2.5 million thresholds in individual checking accounts with a growth rate of 150% since the beginning of the year.

The essential banking facilities provided by C6 include account opening, money transfer, withdrawals, and debit/ credit cards with zero annual fees. Its business also focuses on providing free automated toll service tag (C6 Taggy), money transfers via the SMS service C6 Kick, and, a US dollar account, Conta Global. Additionally, the Company also offers a trading forum that has access to over 120 assets as well as ‘deposit certificates’. All these features are available for free to the TIM Holding clients. In return, TIM customers will have access to the bank’s app wherein no internet plant will be deducted for using the app. In fact, the user will get a 3GB bonus internet for making recharges using C6 Bank app for an amount as low as R$ 15 and for TIM Beta prepaid clients, a 4GB bonus internet upon making recharges of at least R$ 60.

According to the financial report released on 30th June 2020, in the second quarter, the company generated net revenue of R$ 3,987 million which was down by 6.5% compared to the second quarter of 2019. Also, the net service revenues declined by 3.4% y-o-y and the net products revenue fell by 69.4% y-o-y in 2Q20 due to the impact of COVID-19.

This agreement, however, does not establish a joint venture and, therefore, TIM will maintain its independence operations. Nevertheless, depending on the progression of the partnership’s outcomes, TSA (TIM Participações S.A.) may become a minority owner in C6, in an objective-based reward scheme.

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