The success of BMG competitive strategy

BMG is a financial institution that is privately owned and controlled by the Pentagna Guimaraes family. The family entered the Brazilian banking industry in the 1930s by establishing the Banco de CreditoPredial S.A. It was later renamed to Banco de Minas Gerais S.A.

BMG is a commercial bank offering a variety of financial products to their clients. For years, BMGs sales strength and professional operations have given it a cutting age in the Brazilian financial sector. The institution was able to create a brand that is a household name in Brazil because of its tradition, ability to tap into modern technology and to understand and move with major market shifts.

BMG concentrated in wholesale and consumer financing as its core business. It took up the largest market share in vehicle financing until the 1980s. After a few years, BMG shifted its focus to providing payroll loans. In 2012, the bank formed a joint venture with ItauUnibanco S.A with the aim of distributing and commercializing payroll loans in Brazil. Currently, the BMG and ItauUnibanco SA are in a unified business offering payroll loans.

The unification strategy in the joint venture seemed to benefit BMG even though it only owns 40% of the total and voting capital stock while ItauUnibanco owns the rest. Some of the advantages that BMG experiences in the joint venture include helping the bank to concentrate on other strategic products, which include financing used vehicles, BMG Express and payroll credit card.

The ability for BMG to stand out in the financial market is attributed to the professional management team that has maintained a high-level corporate governance practices. BMG relies on the board of directors with at least 40% of them being independent members. Under the knowledge and discipline of BMG’s vice president and operation director Marco Alaor, the institution has been able to lure more consumers in Brazil, business entities and investors to their strategic plans.

Marcio Alaor has steered the bank to profitability and sustainable growth successfully despite the presence of intense competition in the Brazilian financial market. Among the adopted strategies that have made BMG remain competitive is tapping into the veteran credit team that utilize technological resources and have an incredible experience to spearhead BMGs values of credit policies.

It is through the director Marcio Alaor and BMG vice president that the bank has been able to diversify its funding and investment practices. BMG core strategy is their intent to ensure that companies and individual consumers can reach their financial goals while at the same time mitigating the institution’s financial risks.