Magalu announced this Monday Jörg Friedemann as the new CEO of MagaluBank, as the company's financial arm is internally called. With 25 years of career in the financial market – the last two of them responsible for investor relations and ESG at Nubank –, Friedemann's mission is to grow the area's businesses, leveraged mainly by the increased penetration of financial products on Magalu's digital platform. Currently, penetration in the physical network, composed of over 1,200 stores and responsible for about a quarter of total sales, is 40%. On 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 continued increase in Magalu's Ebitda margin, currently at 8%.
"The growth potential of our financial vertical is immense, especially with the increase in supply and conversion in our digital channels," says Frederico Trajano, Magalu's CEO. "Jörg's arrival, an executive with extensive experience in the digitalization process of financial products, will certainly help us unlock all this potential."
At MagaluBank, under Friedemann's responsibility, are credit operations (represented by Luizacred, a joint venture between Magalu and Itaú), payments, insurance (a partnership between Magalu and BNP Paribas Cardif), and Consórcio Magalu. Today, Luizacred manages over 6 million credit cards. In the company's latest published financial statement, the ROE (return on equity) was 30%. The insurance premiums issued in 2024, in turn, exceeded 1.5 billion reais. And the growth in 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, a strong brand, scale with 35 million active customers, a very competent team, and we count on very strong and long-lasting partnerships. The opportunities are gigantic."
MagaluBank
Over the past five years, Magalu has strengthened its financial arm through strategic acquisitions, such as Hub Fintech and Bit55, and obtained payment and financial institution licenses, the latter acquired in February of this year.
In 2024, the total transaction volume (TPV) processed by the financial vertical was R$100.1 billion, and the credit card base closed the year at 6.2 million cards, with a portfolio equivalent to R$20.3 billion and one of the lowest delinquency rates in history. In its latest balance sheet, Luizacred achieved a ROE of 30%, a benchmark for the Brazilian financial system, and obtained a net income of R$295 million last year. Magalu Consortium's profit was R$41 million.
