Banks don’t like to be associated with controversial businesses or people that might tarnish their image in the financial world. Most banks stay away from running distasteful ads that could come back and haunt them. But one Brazilian banker is redefining bank advertising in Brazil, and it’s working. His name is Ricardo Guimarães.
Ricardo Guimarães comes from a long line of bank executives. Ricardo’s grandfather, Antonio, started the Land Credit bank in the State of Minas Gerais in 1930, according to a recent article published by CrunchBase.com. Ricardo’s father Flavio took over the bank when Antonio retired. The bank went through a growing and acquisition process through the years, and the name of the bank was changed to the BMG bank in the 1970s. In 1998, Ricardo became president of the BMG Bank, and he saw an opportunity that other bank executives didn’t see.
Ricardo is an avid sports fan, and he decided to combine sports and banking in order to promote bank products like payroll loans. Payroll loans are popular in Brazil because borrowers can get a lower interest loan when they used their monthly income as collateral. Ricardo approached the local Minas Gerais football club and offered to sponsor the club if they agreed to wear the three letter orange BMG logo on their jerseys during matches. R7.com interviewed Guimarães recently, and he said that meeting changed BMG bank forever.
Guimarães became Chairman of the football club known as Atlético Mineiro in 2001, and he remained in that position for five years. During that time, BMG Bank increased their football sponsorships, according to CMBH.mg.gov.br. BMG Bank’s orange logo was everywhere on football days in Brazil and the fans loved it. They loved the fact that a Bank could feel like one of them and when they needed a loan, BMG Bank was the first bank they called. BMG Bank had to hire more than 800 representatives around the country to handle the demand for their payroll loans.
BMG Bank is now the second most profitable bank in the payroll loan business. BMG Bank recently merged with the fifth largest bank in Brazil, Banco Itaú, and a new bank, Itaú BMG Bank, was formed just to handle the demand for payroll loans. The new bank processes new loans at a reduced cost to both banks so the profit margin increases on each loan. Most borrower’s payback payroll loans on time and they keep borrowing, so they can deal with inflation and the recession that is making like miserable in Brazil.