The Magalu announces, this Monday, Jörg Friedemann as the new CEO of MagaluBank, as the financial arm of the company is internally called. With 25 years of career in the financial market – the last two as responsible for investor relations and ESG at Nubank – Friedemann’s mission is to grow the business in the area, leveraged mainly by increasing the penetration of financial products on Magalu’s digital platform. Currently, penetration in the physical network, composed of more than 1,200 stores and responsible for about a quarter of total sales, is 40%. In digital platforms, which account for approximately 75% of revenues, penetration is less than 5%. The expansion of financial activities is expected to contribute substantially to the continuation of the process of increasing Magalu’s Ebitda margin, currently at 8%.
“The growth potential of our financial vertical is immense, especially with the increase in offerings and conversion in our digital channels,” says Frederico Trajano, CEO of Magalu. “The arrival of Jörg, an executive with extensive experience in the digitalization of financial products, will certainly help us harness all that potential.”
In MagaluBank, under Friedemann’s responsibility, are the credit operation (represented by Luizacred, a joint venture between Magalu and Itaú), payments, insurance (a partnership between Magalu and BNP Paribas Cardif), and the Magalu Consortium. Currently, Luizacred manages over 6 million credit cards. In the company’s latest published balance sheet, the ROE (return on equity) was 30%. Insurance premiums issued in 2024, in turn, exceeded 1.5 billion reals. And the growth of the consortium area was about 30% last year.
“I am extremely excited about the challenge. Magalu is in a privileged position to grow in the financial vertical,” says Friedemann. “We have credibility, brand, scale with 35 million active customers, a very competent team, and strong long-lasting partnerships. The opportunities are huge.”
The MagaluBank
Over the past five years, Magalu has strengthened its financial arm through strategic acquisitions, such as Hub Fintech and Bit55, and obtained licenses for payment and financial institutions, the latter obtained in February of this year.
In 2024, the total volume of processed transactions (TPV) by the financial vertical was 100.1 billion reais and the credit card base closed the year at 6.2 million cards, with a portfolio equivalent to 20.3 billion reais and one of the lowest delinquency rates in history. In the last balance sheet, Luizacred achieved an ROE of 30%, a benchmark for the Brazilian financial system, and reported a net profit of 295 million last year. The profit of Consórcio Magalu was 41 million reais.
