The recent downgrade in the credit rating immediately started to shake up things in BMG circles. In fewer than twenty days following the credit downgrade by Fitch, BMG president Ricardo Guimarães decided to layoff seventeen key employees which held executive positions as documented by the Workers Union for Banks operating in the Belo Horizonte region. Nelio Brant, the former director of the Rural Bank and former director of Atletico-MG was layed off.
The downgrade of BMG occurred following the merger with Schahin bank in April of the previous year, for the amount of R $250 million. A government guarantee fund assisted in the final negotiation of the agreement because the Schahin family which had problems financing the deal. When the deal was first announced, market participants had difficulties understanding the reason the deal was made.
Izamara Archangel published in the newspaper Nowdays:
Among the executives let go is Nelio Brant as confirmed by Márcio de Araújo Alaor the vice president at BMG. However, Brant said he will continue to assist the bank in a consultant role. Market analyst believe that the layoffs have sparked a fierce war in the consumer lending market. The state banks have lowered interest rates in order to bolster the government’s ability to put pressure on the financial market to lower bank interest rates.
Márcio de Araújo Alaor is currently the vice president at BMG. He has been instrumental in the banks expansion into the payroll loan business. De Araújo Alaor has received much notoriety in Brazil for his contributions to his community including a food court named in his honor.