Magalu announces on Monday Jörg Friedemann as the new CEO of MagaluBank, the company's internal name for its financial arm. With 25 years of experience in the financial market – the last two as head of investor relations and ESG at Nubank – Friedemann's mission is to grow the business in the area, primarily driven by the increased penetration of financial products on Magalu's digital platform. Currently, the penetration in the physical network, consisting of more than 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 should substantially contribute 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 supply and conversion in our digital channels," says Frederico Trajano, CEO of Magalu. Jörg's arrival, an executive with extensive experience in the digitalization process of financial products, will certainly help us leverage all this potential.
At 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. Today, Luizacred manages more than 6 million credit cards. In the latest published balance sheet by the company, the ROE (return on equity) was 30%. The insurance premiums issued in 2024, in turn, exceeded 1.5 billion reais. And the growth of the consortium sector was about 30% last year.
"I'm extremely excited about the challenge. Magalu is in a privileged position to grow vertically in finance," says Friedemann. We have credibility, a brand, scale with 35 million active customers, a very competent team, and we rely on very strong and long-lasting partnerships. The opportunities are enormous.
MagaluBank
In the last five years, Magalu strengthened its financial arm through strategic acquisitions such as Hub Fintech and Bit55, and obtained licenses for payment and financial institutions, the latter acquired in February of this year.
In 2024, the total volume of transactions processed (TPV) by the financial vertical was 100.1 billion reais, and the credit card base ended the year with 6.2 million cards, with a portfolio worth 20.3 billion reais and one of the lowest delinquency rates in history. In the latest balance sheet, Luizacred achieved an ROE of 30%, a benchmark for the Brazilian financial system, and recorded a net profit of 295 million last year. Magalu Consortium's profit was 41 million reais.
