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UBS buys Brazil's Banco Pactual

UBS, one of Europe's largest banks, is to buy Brazilian investment bank Banco Pactual for an estimated $2.6 billion.

The purchase by the Switzerland-based bank marks a strategic move into the emerging markets of South America, with Brazil possessing one of the world's fastest growing financial markets.

Huw Jenkins, the CEO of UBS Investment Bank, said that the acquisition was an important part of the bank's global strategy for the future.

"This deal is a cornerstone in our strategy to increase penetration in emerging markets within fixed income and equities," he said.

"In 2005 the investment banking fee pool in Brazil was one of the largest among emerging economies and made up approximately 40 per cent of the investment bank fee pool in Latin America."

"Pactual's market strength will complement UBS's existing position in Latin America," he added.

UBS's purchase of Pactual follows its expansion last month into North America, buying US-based Piper Jaffray's brokerage unit for an estimated $575 million.

The bank also announced record profits earlier this month, thanks to a booming investment banking sector and a solid income from its private banking business.