A Nu Dawn, A Nu Day

Plus: Metro Bank, Stablecoins, Sell-Side Analysts

One of the best – and easiest – trades I ever did took place around ten years ago. I’d been in Brazil, scouting for investment opportunities, and had visited management at the big banks headquartered in São Paulo. The city is a tough one to navigate – one of the most traffic-congested in the world. I moved slowly in an armoured vehicle between meetings, only later finding out that high rollers commute by helicopter. 

But it was worth it. Management described to me a banking sector that was one of the most profitable in the world. A history of hyperinflation kept interest rates high. Simply buying and holding government bonds was a profitable enterprise. Most private lending was reserved for large corporations, and these relationships fuelled banks’ consumer business – employees typically maintained a bank account with whichever bank their employer used. Interest rates on consumer loans were justifiably high because charging overdraft fees was prohibited and a lopsided credit scoring re…

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